Retrans, Media Ownership Not Linked, Broadcasters Tell FCC
Media ownership and retransmission consent are separate issues with different FCC dockets and shouldn’t be examined in the same proceeding, many broadcasters said in filings on the congressionally mandated 2010 quadrennial ownership review. NAB, the Fox network and companies that own TV stations affiliated with other networks, including Gray and Nexstar, rejected comments earlier this month by the likes of the American Cable Association (ACA) and Time Warner Cable linking arrangements where stations jointly negotiate carriage deals to ownership (CD July 9 p6). One mid-size broadcaster said such deals can violate ownership rules.
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The FCC “should properly view these comments as misdirected efforts to re-litigate matters that are not at issue” here, the NAB said. “Neither Congress nor the Commission placed any limitations on the number of markets, systems, stations or programming streams that could be simultaneously addressed as part of the same rounds” of retrans negotiations, the group said. Time Warner Cable and the ACA, also cited in the NAB’s filing, attempt to use the quadrennial review to seek reform of deals between TV stations and multichannel video programming providers, Fox said. “The Commission should reject TWC’s and ACA’s attempts to bootstrap into this proceeding -- which is designed to review the FCC’s media ownership rules -- the MVPD’s attack on retransmission consent."
NCTA raised for the first time the issue of arrangements like local marketing agreements as having import for retrans and ownership, in a filing in docket 09-182. It asked the regulator to ban LMAs and shared services agreements letting one entity strike carriage deals for more than one top-four rated TV broadcaster in a market. “The issues covered in this proceeding largely do not directly concern cable television operators or programmers. For this reason, NCTA has participated in only a limited capacity in previous such proceedings,” it said. “But broadcasters have in some instances combined the bargaining leverage of multiple retransmission consent stations in a market when negotiating with individual cable operators in that market."
"Ignore the call to use its broadcast ownership rules as a means to regulate in other areas” was Nexstar’s advice for the commission. The Coalition to Preserve Local TV Broadcasting asked the agency to “reject the opponents’ empty attacks on the innovative solutions utilized by broadcasters to continue serving the public interest despite the difficult market conditions and intense multiplatform competition they now face.” LMAs and other local arrangements are “entirely legal” and allow costs to be cut without trimming news, said the group, whose members include Granite Broadcasting, Saga Communications and 14 other companies that own a total of 150 TV stations. Retrans issues raised by ACA and TWC are dealt with in filings in docket 10-71, on those deals, and “are not properly before the Commission in this proceeding,” Gray said.
The link between the two issues is “quite logical,” ACA Vice President Ross Lieberman said in an interview. Retrans “is becoming an increasingly important revenue stream for broadcasters, and competition amongst local stations for retransmission consent revenue is just another form of competition,” he said. “Joint retransmission consent negotiations, which reduces competition, particularly retransmission consent negotiation, is perfectly appropriate of the commission to review as part of its [ownership] proceeding, which is designed to promote competition.”
Whether LMAs violate ownership rules “is a legitimate question for” review, said Senior Vice President Andrew Schwartzman of Media Access Project, an opponent of consolidation that didn’t file replies in docket 09-182. “At first blush, whether they are leveraging their unlawful ownership activities to gain advantage in retrans is not, in my opinion, relevant."
Failing station waivers for common ownership of more than one station in markets without eight other TV broadcasters only help the “most desperate stations,” said Morgan Murphy Media, owner of five TV stations. “The rules have driven some stations that are viable but not yet ‘failed’ or ‘failing’ in smaller markets to enter into non-attributable shared services and/or joint sales arrangements as an alternative to declaring bankruptcy or ceasing business altogether.” Hubbard Broadcasting, owner of 13 TV stations, again asked the commission to clarify duopoly rules. It said some shared services arrangements resulted in “the substantial common control of television station assets, personnel, and programming when legal common ownership is prohibited by the Commission’s rule.”