Retrans Consent Woes May Mean Many RLECs Get Out of Video Business, NTCA Says
Many RLECs in the Midwest plan to quit offering video service, which should be additional fuel for the FCC's consideration of changes to the "totality of circumstances" test for good-faith negotiating, NTCA said in a filing posted Monday in docket…
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10-71. The filing included a summary of a survey of 68 RLECs done by Vantage Point Solutions, submitted to back up NTCA's assertion that such multichannel video programming distributors are finding that marketplace "increasingly difficult for smaller MVPDs in the face of escalating program costs, unreasonable demands with respect to bundling and tiering of content, and 'take-it-or-leave-it' negotiating tactics by content owners," NTCA said. As a result, more than two-thirds of the RLECs surveyed lost money on video services, while 5 percent had profit margins on video products higher than 6 percent, NTIA said. "Particularly given that NTCA members serve areas that, in some cases, may have no access at all to over-the-air signals, such trends and reports are troubling," the group said. According to the survey, taken in December, 88 percent of RLECs surveyed rated frustration with retrans consent negotiations an "8" or higher on a 1-10 scale. Fifty-four percent of respondents saw programming costs go up 100 percent or more after their latest retrans consent negotiations, including 22 percent whose rose more than 200 percent, Vantage Point said. Without changes to the rules on content acquisition, "video competition in rural areas of the country will disappear" because 66 percent of respondents said they wouldn't offer video service in five years if current trends continue, Vantage Point said.