In comments filed with the FCC, the National Association of Broadcasters pointed out that there is no evidence that television retransmission consent fees are a major cause of rising cable prices, and that includes fee negotiations conducted on behalf of more than one station.
NAB argued that cable is misleading the FCC regarding the effect of broadcast retransmission fees; that it is the MVPD community, not the broadcast community, that is misusing market power; that cable’s claims about joint negotiations are misleading; and that current retransmission consent rules are in the public interest.
NAB wrote, “Cable television interests continue to reiterate inaccurate claims about retransmission consent, including erroneous contentions that a broadcaster negotiating a retransmission consent agreement on behalf of more than one local television station harms the public. Although NAB already has shown that these claims are unmeritorious and misleading, cable operators and a cable trade association have persisted in repeating them in recent submissions to the Federal Communications Commission.”
Cable’s claims fail to hold water due to their “…lack of empirical evidence and theoretical rigor,” stated NAB.
NAB said that out of every dollar or revenue earned by cable companies, only 22 cents is spent on programming fees, and only two cents is spent on retransmission consent with local broadcast stations. The 20 cent/’two cent disparity in favor of cable channels exists despite the fact that broadcast programming remains the most popular.
NAB said that if the government steps into retransmission consent on the side of MVPDs, all it will be doing is inflating MVPD profit margins, saying there is no assurance that any savings realized by MVPDs by such intervention will be used to the benefit of subscribers.
“In any event,” observed NAB, “it is absurd and cynical for cable providers to pose as protectors of consumer welfare in the retransmission consent debate. In light of cable’s long record of increasing subscriber fees well beyond the rate of inflation – which pre-dates by many years the emergence of cash compensation for operators’ retransmission of broadcast signals – operators are more accurately characterized as pocketbook protectors, not consumer protectors.”
NAB noted that on a national basis, MVPDs are far more consolidated than broadcasters, and at the local level, market power generally resides with very few competing companies. As a result, local broadcast stations are the ones that lack leverage, especially compared to that available to a pair of stations negotiating jointly.
NAB noted that maintaining a healthy local broadcast service is critical, since it is generally the only source of local news and emergency information available on a cable channel lineup.
The full NAB filing can be read here.