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NAB submits study to FCC debunking cable retransmission claims

The National Association of Broadcasters last week submitted a new study to the FCC showing that the retransmission consent process is working as Congress intended.

The study, conducted for the NAB by Navigant Economics, addresses “flaws and errors” in a study conducted by Compass Lexecon filed with the FCC in December 2009 by the National Cable & Telecommunications Association (NCTA), the NAB said in a letter dated May 6 accompanying the new study.

“The evidence shows that retransmission consent is achieving Congress’ intended purpose of allowing broadcasters to receive an economically efficient level of compensation for the value of their signals, and that this compensation ultimately benefits consumers by enriching the quantity, diversity and quality of available programming, including local broadcast programming,” the Navigant Economics study said.

The NAB-sponsored study took issue with several points raised in the Compass Lexecon study:

• The “incomplete and irrelevant” analysis of the power of broadcasters in retransmission consent negotiations;

• The “game theory” model of bargaining power used in the Compass Lexecon study, which ignores an analysis of consumer welfare;

• The overstating of the impact of retransmission consent negotiations on consumer prices and on MVPD subscriptions;

• The failure of Compass Lexecon to state how rare impasses in negotiations actually are; and

• The lack of evidence that programming costs or retransmission consent fees have an impact on MVPD subscription fees.

The report also addresses the claim that interruptions to service happen routinely stemming from retransmission consent impasses. "Aggregate service interruptions [related to retransmission consent] continue to represent approximately one one-hundredth of one percent of annual U.S. viewing hours," the study said.