NAB, NCTA Square Off Over Competition
By John Eggerton -- Broadcasting & Cable, 1/2/2007 10:31:00 AM
Broadcasters have told the FCC in a filing that the retransmission consent regime is working very nicely, thank you, and does not disadvantage multichannel video programming distributors (MVPDs).
In reply comments to the FCC on its assessment of the state of competition in the video marketplace, the National Association of Broadcasters focused on the retransmission consent regime, saying that the cable industry was trying to "pass the buck" by blaming rising cable prices on retransmission consent negotiations, in which cable companies must negotiate for carriage with TV stations that to not elect must-carry status.
Using recent FCC cable rate data as ammunition, broadcasters preached to the FCC choir about the 93% ris4e in cable prices since 1996, and pointed out that, for the most part, stations don't get money for their signals and so couldn't be blamed for rising prices.
Saying that TV stations are prime channel real estate for cable, they argue that retransmission consent rules allow for broadcasters to be "fairly compensated for supplying that increased value."
The "real culprit" in rising cable prices, said the NAB, is limited competition in the cable marketplace, pointing to a General Accounting Office study that prices are lower in communities that have wireline competition.
Nor surprisingly, the cable industry was having none of it. In its filing to the FCC, the National Cable & Telecommunications Association said that the video marketplace is so "drenched in competition" that no credible case can be made that "further government intervention is necessary," though it was referring more to the telephone company's attempts, with some success, to gain a clearer regulatory path to video and broadband competition to cable.
NCTA took aim at the FCC price study and its 93% boost since 1996. It called the data old and obsolete, said there were other reasons for the GAO study's findings that had nothing to do with competitor's competitiveness. They included that some of the lower prices could be attributed to overbuilders who had undercut the market price and gone under themselves, or others who had bought systems from some of those bankrupt overbuilders for pennies on the dollar allowing them to charge less. Still others were operated as not-for-profits, said NCTA.
In any case, said NCTA, the price hike figures to not include the value or service hikes that accompanied it. It used a price "per viewing hour" that showed minimal increases and a decrease when adjusted for inflation.
It did not use the per-channel argument it has made in the past, when it pointed out that on a per-channel basis, prices had not gone up at all. The FCC this year stopped using that figure, arguing it was mooted by the cable industry's refusal to offer a la carte service and allow viewers to pay only for the networks they watched or wanted.
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