NAB to FCC: Cable Market Is Anything But Competitive

Cites recent mergers, Multichannel story on consolidation
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The National Association of Broadcasters told the FCC this week that far from being highly competitive, the MVPD marketplace is highly consolidated at all levels and continues along that path at a brisk clip.

That came in a reply comment filing on the state of video competition. The FCC is collecting input for its next annual report. NAB pointed to the merger of AT&T and DirecTV and the proposed merger of Comcast, Time Warner Cable and Bright House and said given the recent "massive" consolidation, the FCC should take a hard look at competitive conditions rather than try to fix a retrans system they say isn't broken.

MVPDs have argued they have plenty of competition.

NAB said the FCC has been ignoring consolidation at the recent and local levels—by contrast, the FCC limits local market broadcast concentration.

NAB also used some ripped from the headlines fodder, citing last week's announcement that Altice, the owner of Suddenlink Communications, had a deal to buy Cablevision, "resulting in the combination of the seventh and eighth largest MVPDs."

NAB relied extensively on a story in Multichannel News about recent cable consolidation, even including the entire Aug. 17 cover story, Eat or Be Eaten by senior finance editor Mike Farrell as an attachment to its filing.

NAB pointed to clustering of systems by cable operators (swapping systems that better fit their geographic profiles), saying there are "often only one or two dominant cable systems, each serving a high proportion of television households in many local markets."

"It is undisputable that the MVPD marketplace is much more concentrated now than in the past."

NAB's arguments in the video competition come as the FCC undertakes a congressionally mandated review of good faith retrans negotiations, ponders eliminating broadcast exclusivity rules, and has voted to reverse the local cable competition presumption to one of competition unless proven otherwise.

NAB in particular bristles at MVPD complaints, made loud and long in Washington, about the rising price of retrans. "Complaints about 'skyrocketing' retransmission consent fees continue to ring hollow given SNL Kagan’s estimate that in 2014 total broadcast retransmission consent fees were less than the programming fees paid to regional sports networks and reached only 10.8 percent of the programming fees paid to basic cable and regional sports networks combined."

Rather than go after retrans, NAB says the FCC should adopt customer service standards for cable—broadcasters frequently point to the cable industry's historic customer service issues, which that industry has acknowledged and has pledged to improve. In addition, NAB said the FCC should reform broadcaster ownership rules so broadcasters can supply more of that competition for eyeballs.

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