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House Committee passes STELA version enabling broadcaster "collusion"

Tue, 03/25/2014 - 1:20pm
Brian Santo

The increasingly bitter fight between broadcasters and cable companies over retransmission consent regulations is threatening to cripple upcoming legislation nominally about satellite TV services.

Broadcasters are squeezing larger and larger retrans fees out of MVPDs, and as negotiation after negotiation grinds down in stalemate, channel blackouts are becoming common. Two of the more recent examples of stalled negotiations both involve Viacom, which is seeking higher fees from both Cable One and from Shentel. (See CableOne CEO Tom Might’s video below).

Congress has been unable to agree to revisit the Telecommunication Act or the Cable Act, but Congress is obligated to re-authorize the Satellite Television Extension and Localism Act (STELA), and many in the industry and government intend to use the opportunity to address institutional problems in the television business at large – including retransmission consent.

Broadcasters are resistant, demanding a “clean” bill that doesn’t address any of these issues.

The House Energy & Commerce Committee’s Subcommittee on Communications and Technology, dominated by Republicans, obliged by going beyond offering a clean bill. They passed a version that explicitly allows broadcasters to band together in negotiations with MVPDs, a maneuver that the FCC is in the process of trying to bar, and which the American Cable Association (ACA) has explicitly called “collusion.”

ACA president and CEO Matthew M. Polka “Both the Federal Communications Commission’s Chairman and the Department of Justice’s Chief of the Antitrust Division – representing the nation’s expert agencies – have both recognized that consumers and competition are harmed when separately owned, same-market broadcasters collude in the sale of retransmission consent to multichannel video programming distributors (MVPDs), including independent cable operators who are ACA members.

“Available evidence shows that such collusion raises retransmission rates by at least 18 percent and that these unjustly gained higher rates are passed along to consumers in the form of higher bills.  Not surprisingly, ACA members and the millions of customers they serve are quite distressed with Section 3 of the discussion draft passed today in that it provides broadcasters with a statutory right to engage in this highly dubious practice.”

“We appreciate that Energy & Commerce Committee Democrats, especially Rep. Henry Waxman and Rep. Anna G. Eshoo, highlighted this section of the bill as one that needs to be changed before passage by the full committee. The commitment of the Subcommittee’s top Republican, Chairman Greg Walden, to try to pass a bipartisan bill was appreciated.

“For consumers’ sake, we hope Congress realizes that collusion under any circumstances is the wrong policy for our nation. ACA stands ready to work with the Committee to find a solution that protects consumers and establishes a more competitive marketplace.”

 

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