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  • Immense Disparity in Economic Power Cited
    ACA Says Conditions Needed In Liberty Media/DirecTV Merger   4-5-07

In comments filed on March 14, the American Cable Association asked the Federal Communications Commission to impose conditions on the pending Liberty Media/DirecTV merger to protect consumers served by smaller, independent cable companies in smaller markets and rural areas. “Here, we face yet another proposed combination aligning the market power of ‘must have’ channels with the market power of the one of the nation’s top MVPDs,” said ACA in the opening line of its comments.

“ACA members share a vital interest in this proceeding. All ACA members currently transact with Liberty- and DHC-controlled (Discovery) companies for satellite programming. All ACA members face DirecTV as their principal competitor,” ACA continued. “The anticompetitive potential of the proposed combination and the immense disparity in economic power between Liberty/DirecTV and ACA members place small and medium-sized cable companies and the consumers they serve at serious risk.”

ACA outlined the need for stringent conditions in the Liberty/DirecTV Merger by showing how the previous merger between News Corp. and DirecTV allowed for regulatory gaps that left ACA members and their customers vulnerable to attack by much larger media conglomerates. The filing demands that, “Any approval of the transaction should adjust, clarify, and expand the small and medium-sized cable company conditions to fill the gaps and plug the loopholes through which transaction-specific abuses of market power continue to flow.”

Specifically, ACA requested that the FCC impose the following conditions:

  • Ensure that the program access rules and nondiscrimination conditions cover programming channels owned by Discovery Holdings Company.
  • Clarify and strengthen the rights of a collective bargaining agent appointed by independent cable companies to ensure that regional sports networks owned by Liberty/DirecTV are required to negotiate with the collective bargaining agent.
  • Extend arbitration notice periods in such network agreements to prevent inadvertent loss of arbitration rights by independent cable operators or their bargaining agent.
  • Prohibit Liberty- and DHC-affiliated programmers from engaging in noncost-based price discrimination.
  • Expand the scope of the small and medium-sized cable company conditions to include all ACA members.
  • Place a term of 10 years on the small and medium-sized cable company conditions.
  • Affirm that the small cable company conditions imposed on News Corp.-affiliated broadcast stations and satellite channels shall remain in place for their full term in order to serve the public interest by bringing a measure of predictability to program access, retransmission consent, and RSN renewals.

“With these adjustments, backed by firm Commission oversight enforcement, the conditions may better protect against the substantial public interest harms threatened by the Liberty/ DirecTV combination,” the ACA comments concluded.

A copy of ACA’s complete filing can be found on their Web site at www.americancable.org.