Affiliate organizations for the four major networks filed joint comments with the FCC which provided factual evidence that the retransmission consent negotiation process is working just fine, and that MVPD attempts to acquire FCC intervention were nothing more than a search for an extra competitive advantage.
The coalition, made up of affiliate organizations from ABC, CBS, Fox and NBC, characterized the MVPD-initiated FCC probe into retrans as “an attempt to tilt the retransmission negotiating process in favor of MVPDs and against local television stations.”
Arguing to maintain the status quo, they stated, “Without the ability to negotiate for fair retransmission consent compensation, local stations would have fewer financial resources with which to compete with MVPDs in the acquisition of quality programming, ultimately relegating the free, over-the-air television service to a non-competitive programming service.”
The group proceeded to shoot down many of the MVPD complaints. First of all, they pointed out that the cost of retrans is not in any way exorbitant – it amounts to 2.7% of programming costs and only 0.7% of income generated by the $99 in monthly fees paid to them by the average subscriber.
The group noted that out of all the negotiations that go on for retrans, only a rare minority lead to threats of service disruption, and even fewer actually get to that point. The group said that loss of service is far more likely to be a result of an electrical outage or a technical problem with the MVPD itself than a contentious negotiation process.
Finally, the group objected to establishment of an arbitration process, saying it would be a financial burden, particularly on smaller stations, and noting that not even all of the MVPD community supports the concept, citing in particular Time Warner CEO Glenn Britt, who said it would inevitably drive up subscription costs.
RBR-TVBR observation: If broadcast television is a must-have service for an MVPD, and it only amounts to 2.7% of overhead, you’d think they’d be thrilled, and would be more than happy to pay much more if need be to keep their program lineup in line with what their customers desire. Unbelievable.