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10/04/2017

ACA Launches "TV Ransom" To Highlight Broadcasters' Abusive Behavior With Retransmission Consent Resulting In Consumer Harm

ACA Launches "TV Ransom" To Highlight Broadcasters' Abusive Behavior With Retransmission Consent Resulting In Consumer Harm

 Campaign Launch Timed To 25th Anniversary Of Retrans' Birth

 

PITTSBURGH, October 4, 2017 -The American Cable Association (ACA) today launched TV Ransom, a national campaign to set the record straight that corporate broadcasters are to blame for out-of-control retransmission consent fees and TV station blackouts that blindside consumers with the needless loss of their favorite news, weather reports, and national sporting and entertainment events.

 

Across the country hundreds of local cable operators are beginning to negotiate with a handful of corporate media conglomerates that own many of the local TV station affiliates for ABC, CBS, FOX and NBC. This process, called retransmission consent, pits ACA's 750 small and mid-sized cable operator members, who predominantly serve rural Americans and provide competition to large operators in urban markets, against huge corporations with no stake or ties to these local communities. The outcome is predictable: Broadcasters leverage their market power to charge these smaller providers the highest rates in the market, raising the cable bills of more than 7 million cable customers across the country.

 

"Retransmission consent should be a straight-forward business negotiation, but, unfortunately, these corporate broadcasters abuse their market power to extract outrageous fees from cable customers," said Matthew M. Polka, President and CEO of the American Cable Association.

 

Smaller pay-TV providers are not alone regarding concerns about runaway retransmission consent fees. A senior executive of Comcast, which owns the NBC network and 28 NBC and Telemundo local television stations, recently described retransmission consent fees as the "No. 1 driver of increases in cable prices for consumers these days."

 

Since passage of the 1992 Cable Act, which marks its 25th anniversary on October 5, cable operators and broadcasters have been negotiating "retrans." And for 25 years, the fees that cable operators and their customers are forced to pay have been growing at exponential rates even though viewership is down: Retrans fees rose about 30 times over the last decade while network primetime audiences fell by more than half, according to SNL Kagan and Nielsen.

Furthermore, broadcasters generally extract the highest fees from the smallest cable operators and their customers, and their demands keep escalating. SNL Kagan projects that these fees will cost U.S. consumers and satellite and cable operators $11.6 billion by 2022, up from $8.6 billion in 2017, a stunning 35 percent increase in just five years.

 

Unfortunately, broadcaster overreach doesn't stop with aggressive tactics designed to line their bank accounts. These broadcasters think nothing of disrupting local programming - even in an emergency - in an effort to gain leverage in negotiations. A few examples:

  • As Hurricane Irma targeted the Gulf Coast, Hearst Television took down its signal for two markets in the path of the storm - Orlando and New Orleans - even as broadcasters touted their commitment to the public during extreme weather events on Capitol Hill.
  • For a month in early 2017, Northwest Broadcasting simultaneously blacked out ABC, CBS, NBC and FOX signals in two Mississippi communities served by Cable ONE.
  • Shortly after acquiring an NBC affiliate station in Toledo, Ohio, Sinclair Broadcast Group demanded that Buckeye Broadband pay significantly higher fees to access the station's signal. That demand led to Sinclair taking the station off the air for 212 days before an agreement could be reached.

"Every day, smaller cable operators work hard to ensure our neighbors have access to the video, broadband, and phone services they want and need," continued Polka. "Meanwhile, the corporate broadcasters are going unchecked as our members and their customers suffer through blackouts and get hit in the wallet, repeatedly."

 

The TV Ransom campaign is designed to: 1) illustrate how corporate broadcasters use their market power to take advantage of retransmission consent negotiations to extract escalating fees from cable customers; 2) expose corporate broadcasters' weak business models, which lead to their aggressive negotiation tactics designed to make money off the backs of consumers; and 3) demonstrate how consolidation of broadcast and media companies is taking local TV station ownership corporate, so that local news is no longer local, and "free TV" is no longer free. 

 

About the American Cable Association:  Based in Pittsburgh, the American Cable Association is a trade organization representing about 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/