Cable organization attacks TV LMAs

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The American Cable Association is calling for an FCC investigation into local marketing agreements (LMAs) between television stations, particularly when the operating partner in such an agreement handles MVPD retransmission consent negotiations for all of the stations.


“ACA believes the FCC should now determine whether LMAs are skirting national policy intended to promote local broadcast competition,” ACA President and CEO Matthew M. Polka said. “LMAs set the price for retransmission consent for one broadcaster and its direct horizontal competitor, leading to higher retransmission consent costs for consumers.”

ACA says that the rules generally prohibit owning two or more television stations in a market to protect consumers and advertisers from anticompetitive behavior, and that LMAs are used to get around the prohibition.

“We hope the FCC takes this opportunity to fix a broken retransmission consent process that permits a broadcaster like Sinclair to pull its signals from cable systems while a retransmission consent grievance is being reviewed by the FCC, inflicting harm on consumers who expect uninterrupted access to local news, weather and time-sensitive information such as school closings, traffic delays and missing-child alerts,” Polka said.

Polka concluded, “ACA has long advocated for retransmission consent reform because of the vulnerability of ACA members and their customers in retransmission consent negotiations due to a lack of market power. As the FCC noted when News Corp. took effective control of DirecTV, small and medium-sized cable operators are particularly vulnerable to the withdrawal of `must have’ programming.”

RBR-TVBR observation: Note how Polka calls broadcast programming “must have.” All broadcasters are asking for is fair compensation in return for providing this “must have” programming. Still, that is just one issue. The other, television LMAs, figures to be a major topic of conversation in Washington in 2010.