NCTA To Levin: Retrans Raises Prices, Hurts Consumers

Cable industry trade group argues that increases in retransmission consent fees would "inevitably" raise consumer costs

The National Cable & Telecommunications Association told the FCC Dec. 16 that both common sense and a study it recently commissioned conclude that if broadcasters boost retrans fees, they will "inevitably" raise consumer costs and lead to consumer harm.

That was the message from NCTA VP and General Counsel Neal Goldberg to FCC broadband advisor Blair Levin in a letter Wednesday. The letter was in response to Levin's public request to the National Association of Broadcasters for information backing up its assertion that over-the-air broadcast signals were a governor on cable and satellite prices, and for NAB's reaction to the "alternate view" that retrans fees boost cable and satellite costs to consumers.

NCTA, using a study it commissioned in concert with DISH and DirecTV, weighed in with its own response, which it said "may be relevant to the inquiry regarding spectrum usage. NAB and Levin have traded letters in the public docket related to meetings in which NAB was making the case for why it should be allowed to hold onto its broadcast spectrum rather than give it up to wireless broadband.

The study, by Jonathan Orzag, Michael Katz, and Theresa Sullivan, argues that in addition to higher sub fees, the current retrans system leads to "lower consumer welfare" because distributors will have less to spend on other services.

Other problems it says, are loss of TV station signals when negotiations break down, and potential problems when stations negotiate for stations with which they have leveraged marketing agreements (LMAs) in the same market--an issue that has been highlighted by Mediacom's commplaint against Sinclair.

NCTA has raised similar concerns in the FCC's video competition proceeding.