Why is it that local broadcasters face a slew of regulatory restrictions, particularly regarding ownership, while similar rules for MVPDs are almost non-existent? That’s what the FCC needs to look at when it considers the AT&T-DirecTV merger.
While NAB takes no stand on whether or not to approve the merger at this point, it does point out that despite claims that the two companies are for the most part complimentary to one another, it will nevertheless combine MVPD services that will total 25.7 million video subscribers, or 25.6% of the entire MVPD universe.
In comments to the FCC, NAB stated, “NAB urges the Commission to fully investigate the impact of the proposed transaction on MVPD concentration and competition in the video marketplace. Such an analysis is critical to making a public interest determination regarding consumers’ access to a diverse array of programming. While NAB takes no current position on whether the proposed merger should ultimately be approved, the Commission must evaluate the potential impact on local viewers and its longstanding localism goals. Specifically, the Commission should consider conditions to promote localism, such as a requirement that DIRECTV offer consumers local broadcast stations in all 210 markets in which it operates.”
NAB cited a number of effects of the current regulatory imbalance:
* Local broadcasters are forced to negotiate for retransmission consent with huge corporations
* On top of that, they must compete with these conglomerates for viewers, advertising and programming
* MVPDs continue to consolidate – the top 10 now control over 90% of the market, and if this merger and Comcast/TWC are approved, the top two will control 55% of the market.
* There are fewer local MVPD options for consumers as the result of mergers
* The combined presence of AT&T and DirecTV in certain markets will significantly reduce competition and increase the merged entity’s bargaining power, while reducing its operating expenses and gaining yet another competitive edge over local broadcasters
* The NAB believes it is time that DirecTV offers local-into-local television service in the 13 DMAs where it has still not done so.
NAB concluded, “The Applicants are required to demonstrate that the public interest benefits of the proposed transaction outweigh potential harms resulting from the transaction. To make this public interest determination, the Commission should fully investigate the impact of the merged entity’s size and its effect on competitors’ ability to offer services that contribute to the Commission’s goals of competition, diversity and localism. The public interest analysis must take into account the continuing disparate regulation of broadcast competitors that provide to viewers the type of local service the Commission has long endeavored to promote. Broadcasters must be allowed to enter into combinations that allow them the scale and scope that will make them viable competitors to MVPDs generally, especially in light of continuing mergers among MVPDs.”