NAB Says Proposed Retrans Changes Would Be "Devastating"

Files comments with FCC asking to "deny" pay-TV operators retrans leverage

By John Eggerton -- Broadcasting & Cable, 5/19/2010 11:09:24 AM

The National Association of Broadcasters -- which now includes all the major networks, joined by the major network affiliate associations -- asked the FCC to "deny" giving cable operators and other pay-TV providers more leverage in retrans negotiations, saying to do so would make TV stations a non-factor in the competitive marketplace.

NAB and company filed comments with the FCC May 18, the deadline for initial input to the FCC on a proposal by a cadre of major cable operators -- excluding Comcast -- that the FCC make changes to the retrans regime. Proposed changes included outside arbitration, standstill agreements and even unbundling station carriage negotiations from co-owned cable channels, though there is less solidarity on that point.

The broadcasters argue that the amount of time multichannel video subs are without MVPD access to TV station signals due to retrans impasses is brief when calculated as a percentage of total viewing hours. They say that arbitration would drain the resources of smaller stations, compromising their ability to deliver on the public service obligations as licensees.

In short, they argue, the proposed changes "would have devastating consequences for competition, for the program services provided by local stations, and, more importantly, for the nation's television  viewers."

As it stands, they say, retrans payments account for less than 1% of an average $99 monthly cable bill, while local stations are "the most popular programming services." They argue that cable rates are driven not by payments to broadcasters but by high market shares that allow operators to charge higher prices.

"These fees are but a fraction of the fair market value for the quality and attractiveness of the service broadcasters provide," said NAB.