PITTSBURGH – American conventional television stations are gouging cable companies with dramatic increases in retransmission consent payments, reported the American Cable Association today.
The group’s survey found a 271% rise on overall retrans payments so far this year, “resulting in higher cable bills for consumers and injuring operators’ ability to provide advanced services actually in demand,” read’s the ACA’s release upon presenting its report to the FCC.
(Ed note: True, we don’t do too much American news, but given the fight in Canada for a fee-for-carriage for Canadian broadcasters and all the talk about the American retransmission consent regime, we couldn’t resist this report.)
The American Cable Association is a trade group representing more than 900 smaller and medium-sized, independent cable companies who provide broadband services for more than seven million cable subscribers primarily located in rural and smaller suburban markets across America. Kind of like the Canadian Cable Systems Alliance.
"This survey shows that TV stations flagrantly use their market power to charge excessively large retransmission consent fees, demand carriage of affiliated programming over cable operator objections and insist that operators set aside channels for programming still on the drawing board and not even close to being ready for distribution," said ACA president and CEO Matthew Polka.
The ACA report adds that the smallest of its members were the hardest hit. “(S)urvey respondents reported that since the beginning of 2009, their cash retransmission consent payments leaped an incredible 271%. Small systems with 1,000 subscribers or fewer got hit with increases that were 200% higher than the increases experienced by systems with 25,000 subscribers or more.
Unable to meet these demands, about 35% of ACA survey respondents said they were forced to drop TV signals permanently and another 25% said they had to do so temporarily. “Other cable operators had to raise their monthly rates to recover the cost of retransmission consent, postpone launching more HD channels and delay upgrading their broadband Internet access service,” says the release.
The survey also found that the burden of retransmission consent relative to all programming costs is growing rapidly. In 2009, retransmission consent represented 8% of all programming costs, compared to 2.4% in 2008.
The survey, conducted by Clarus Research Group (CRG) in Washington, D.C., included responses from about 25% of ACA members.
“In recent years, ACA has called on the U.S. Congress to reform retransmission consent by levelling the playing field between small and medium-sized cable operators and TV stations that have the ability and incentive to abuse their market power,” adds the press release.
"The retransmission consent process is broken. ACA firmly believes that TV stations’ refusal to bargain in good faith will inspire lawmakers to search for a new solution to bring relief to millions of cable consumers," Polka added.
Unable to meet these exorbitant demands, about 35% of ACA survey respondents said they were forced to drop TV signals permanently and another 25% said they had to do so temporarily. Other cable operators had to raise their monthly rates to recover the cost of retransmission consent, postpone launching more HD channels and delay upgrading their broadband Internet access service.
