The FCC is moving toward barring broadcasters from a set of practices that many MVPDs have for years have been complaining are anti-competitive.
FCC Chairman Tom Wheeler is circulating a proposal among his fellow Commissioners recommending several measures, including the elimination of a certain loophole in current rules that allows media companies to circumvent ownership consolidation rules, and prohibiting multiple local broadcasters from negotiating together.
Wheeler is going to suggest that the Commission specifically bar two or more separately owned top four broadcast stations in the same market from joint negotiation of retransmission consent.
Broadcast stations argue that it is less expensive for them to negotiate together, but Wheeler’s position is that any additional costs incurred by the broadcasters will be outweighed by the benefits to consumers (in the form of lower prices), and that joint negotiations will automatically constitute a failure to negotiate in good faith.
The NCTA’s response was firm but measured, “We are pleased that Chairman Wheeler intends to circulate an order that would rein in the anticompetitive practice which currently allows separately owned broadcast stations to jointly negotiate for retransmission consent payments. As Chairman Wheeler stated, this type of coordinated behavior has resulted in increased prices which are ultimately borne by consumers. We urge the Commission to move forward in adopting the Chairman’s proposal.”
The ACA, on the other hand, whose members are more likely to get the short end of the stick when broadcast stations join each other during negotiations, was on the border of triumphant.
“FCC Chairman Wheeler deserves high praise for addressing the broken retransmission consent market and moving to correct one of its most serious flaws – the collusion practiced by dozens of TV stations owners, who are supposed to be competing with one another. Adoption of Chairman Wheeler’s proposed order would represent a victory not only for fair competition, but also for millions of consumers who are being victimized by TV station conglomerates, which have the perverse idea that collusion is somehow consistent with their legal charter to bargain in good faith,” wrote ACA president and CEO Matthew M. Polka.
The ACA noted that Wheeler’s hand on this subject was strengthened recently by the U.S. Department of Justice. In a filing with the FCC, the anti-trust agency gave its opinion that the joint sale of retransmission consent would be per se illegal unless it's reasonably necessary for some other efficiency-enhancing combination of the stations' operations. In the same filing, the DOJ doubted such efficiencies could ever possibly exist.