The major ad associations have told Senate Commerce Committee leaders they are concerned about the impact of the "Local Choice" proposal on viewers and advertising.
They stopped short of outright opposition, but raised many warning flags about its impact on the "up front" advertising regime and ratings measurement, both of which underpin the broadcasting business model.
"Each spring the networks participate in the 'up fronts' in which they seek to attract advertising from national companies that are willing to purchase time to underwrite program costs in order to present their advertising messages," said the American Association of Advertising Agencies, the American Advertising Federation and the Association of National Advertisers in a letter to the two senators. "A radical transformation of this system in order to implement the option of 'local choice' could erode the entire national system for audience measurement that is essential to the economics of the current system."
Local Choice is the cable-backed effort that would allow MVPD subs to opt out of paying for TV station signals, in effect creating an a la carte regime for broadcasting, but not for cable channels. It would kick in in 2017 according to a proposal backed by Commerce Chair Jay Rockefeller (D- W. Va.) and ranking member John Thune (R-S.D.).
"[O]ur organizations have serious concerns with a concept that would allow viewers to exclude one or more primary local elevision stations–and the advertising carried by those stations–in order to implement an a la carte local broadcast station tier for which viewers would be charged each month," and "are concerned that STAVRA risks undermining the local broadcast model and this long-held objective of communications policy," they added.
STAVRA is the Satellite Television Access and Viewer Rights Act, the Senate Commerce version of must-pass satellite compulsory license reauthorization legislation, a draft of which released last week included Local Choice.
The ad associations urged the senators to proceed with caution and seek out the views of ad buyers to "better understand" how the financial support for programming would be affected by the proposal.