The American Consumer Institute for Citizen Research has released a study arguing that retransmission consent payments are so lucrative for TV stations that it will discourage major stations from participating in the incentive auctions with "devastating" consequences.
"In essence, retransmission consent regulations act to discourage TV stations from participating in the auctions. In other words, these regulations work counter to the policy goal of getting spectrum to its highest and best use, and they are at odds with achieving the National Broadband Plan," ACI says.
The study, which is primarily an indictment of the retransmission consent regime as outdated and counterproductive, concludes that a failed auction could "reduce consumer welfare by roughly half a trillion dollars in the wireless sector."
The study was released only an hour or so before policymakers were scheduled to hash out retrans issues at a Hudson Institute event in Washington.
Asked for comment, the National Association of Broadcasters referred to a recent Media Institute speech by NAB President Gordon Smith. “Let me freely admit that if ‘highest and best use’ is determined only by the calculation of dollars and cents, or by how many gadgets and gizmos quickly mount up on the ash heap of our landfills, broadcasters will lose out in that calculation every time,” Smith said. “But,” he added, “if ‘highest and best use’ includes not only the advantages of our one-to-many architecture, but also the durable public values it serves—reliability, decency standards, children’s programming, news, weather, sports, localism and lifesaving information during times of crisis—broadcasters win every time.”
NAB spokesman Dennis Wharton also had plenty to say. "We'd like to know who is funding this alleged research. It is funded by either Big Pay TV or giant telcos... Both are motivated by a desire to diminish or eliminate a competitive free and local broadcast TV business."
"Telcos hate the idea of broadcasters having a free and spectrum-efficient 'one-to-everyone' transmission architecture. They prefer consumers using their inefficient 'one-to-one' architecture that imposes costly data caps."
"Big Pay TV hates retrans because this is a modest revenue stream that sustains local news and ensures that marquee programming like the Super Bowl, 'Modern Family' and 'Big Bang Theory' remain available to all Americans on broadcast TV."
"We are publicly funded as are all 501c3 organizations," said Stephen Pociask from ACI, who sent the study to B&C/Multi. "It was not funded by any external source. We are not permitted to do directed research. Let them argue with the facts."
A CTIA spokesperson said it did not fund the study.