ATVA: TV Station Consolidation Leads to Higher Retrans Fees

Dec 08, 2023

By Ted Hearn, Editor of Policyband 

Washington, D.C., Dec. 8, 2023 – An organization supported by traditional pay-TV providers is pushing back on the idea that local TV station mergers won’t lead to higher cable and satellite TV bills.

While TV stations continue to pursue ownership deregulation at the federal level, the American TV Alliance (ATVA) predicts that control of local TV stations by just a few owners will increase the retransmission consent fees that cable TV and satellite TV providers pay broadcasters.

“We do not believe an economic study is necessary to support the obvious principle that a broadcaster controlling two, three, or even four major networks in a market has more leverage (and can thus command higher prices) than a broadcaster controlling only one such network,” ATVA said in a Dec. 6 FCC filing.

ATVA’s FCC filing was partly a response to the National Association of Broadcasters (NAB), which is urging the FCC to relax local TV station ownership rules, claiming current market conditions do not justify retention of the FCC's restrictive policies.

ATVA hit back on NAB’s analysis.

“NAB now says that possession of duopolies, triopolies, and quadropolies in a market ‘do[es] not – and could not in today’s competitive marketplace – enable broadcasters to charge higher advertising or retransmission consent rates.’” ATVA said. “Such a claim cannot be squared with the record evidence, including repeated FCC and [Department of Justice] findings, the testimony of [pay-TV] executives, and voluminous evidence of actual marketplace behavior, all of which shows that local broadcast consolidation leads to higher prices, all things being otherwise equal.”

Last week, NAB urged the FCC to relax a rule that bans the ownership of more than one top-four station in market, saying the ability for local stations to merge was especially acute in small markets. NAB said the FCC should reject ATVA’s call that low-power TV stations and multicast versions of ABC, CBS, NBC and Fox should count under the top-four rule.

NAB said that a Big 4 station distributing a second Big 4 station on a digital subchannel did not have an economic advantage over two Big Four stations barging separately with pay-TV providers.

“We noted yet again that ATVA, despite its repetitive complaints about retransmission consent fees generally, has not submitted empirical evidence showing that [pay-TV providers] pay higher retransmission rates to stations airing the programs of two broadcast networks on multiple streams, as compared to other similarly-situated stations with a single affiliation,” NAB told the FCC in a filing.

A federal appeals court has given the FCC until Dec. 27, 2023 to finish its TV station ownership review.

On its website, ATVA describes itself as giving “customers a voice and ask[ing] lawmakers to protect consumers by reforming outdated rules that do not reflect today’s marketplace.” ATVA membership includes small cable TV companies and programmers in addition to major pay-TV companies like Mediacom, Dish and DirecTV.

On its website, NAB describes itself “as the premier trade association for broadcasters” charged with advancing the interests of its members before federal government. Among its members are Nexstar Media Group, Sinclair Inc. and TEGNA.