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On September 20, ACA executives, Professor William P. Rogerson of Northwestern University, and ACA’s attorneys met in separate sessions with Rosemary Harold, Legal Advisor to FCC Commissioner McDowell, and Joshua Cinelli, Legal Advisor to Commissioner Copps. In the meetings, they discussed the potential horizontal and vertical harms of the proposed Comcast-NBCU, and the proposed safeguards to protect consumers and competition as the association had described in its earlier filings. During the meeting, Professor Rogerson presented detailed information, and ACA presented the merger conditions it proposes, key excerpts from which follow below:
Special Conditions Apply To Smaller Operators
1. Upon entering into a Stand-Alone Retransmission Consent Agreement for a Covered NBC Station with an MVPD that serves 125,000 MVPD subscribers or less in the DMA served by the Covered NBC Station, and throughout the life of the agreement, Comcast-NBCU may neither require nor accept fees, terms, and conditions from the MVPD that result in a Net Effective Rate more than 5% higher than the lowest Net Effective Rate of any retransmission consent agreement for the Covered NBC Station with any MVPD including itself, that is currently in force. Moreover, Comcast-NBCU may neither withhold terms and conditions related to carriage of the Covered NBC Station that are made available to other MVPDs, including itself, nor require terms and conditions related to carriage of the Covered NBC Station that are technically infeasible or commercially prohibitive for the MVPD.
2. Upon entering into a Stand-Alone RSN Carriage Agreement for a Covered RSN with an MVPD that serves 125,000 MVPD subscribers or less in the region commonly served by the Covered RSN, and throughout the life of the agreement, Comcast- NBCU may neither require nor accept fees, terms, and conditions from the MVPD that result in a Net Effective Rate more than 5% higher than the lowest Net Effective Rate of any carriage agreement for the Covered RSN with any MVPD including itself, that is currently in force. Moreover, Comcast-NBCU may neither withhold terms and conditions related to carriage of the Covered RSN that are made available to other MVPDs, including itself, nor require terms and conditions related to carriage of the Covered RSN that are technically infeasible or commercially prohibitive for the MVPD.
3. Each principal executive and financial officer of Comcast-NBCU will certify to the Commission on an annual basis that Comcast-NBCU, based on his or her knowledge, has calculated the Net Effective Rate for each retransmission consent agreement for Covered NBC Stations and for each carriage agreement for Covered RSNs currently in force...
B. Special Commercial Arbitration Remedy for Smaller MVPDs
1. An MVPD that serves 125,000 MVPD subscribers or less in either the DMA served by a Covered NBC Station, or the region commonly served by a Covered RSN, may submit a dispute over the terms and conditions of carriage of a Covered NBC Station or a Covered RSN subject to a special commercial arbitration remedy for Smaller MVPDs designed to affordably resolve disputes...
2. The special commercial arbitration remedy for Smaller MVPDs shall be a traditional arbitration conducted in accordance with the Rules for the Special Commercial Arbitration Remedy for Smaller MVPDs contained... different from the “final offer” or “baseball” arbitration outlined [above].
3. An aggrieved MVPD shall be granted an automatic right to continued carriage of the Covered NBC Station or RSN until resolution of the special commercial arbitration remedy for smaller MVPDs.
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Remedies Tailored To Harms
ACA Asks FCC To Impose Transaction-Specific
Conditions For Comcast-NBCU Merger
The American Cable Association has called on the FCC to impose a range of conditions on the Comcast-NBC Universal transaction to prevent the unprecedented media combination from using programming and distribution dominance to undermine competition by greatly escalating the price of cable and broadcast channels that market rivals, including ACA members, must purchase to remain in business.
In previous FCC filings, ACA identified and inventoried the harms stemming from the Comcast-NBCU deal in order to craft and propose narrowly tailored and transaction-specific remedies that would serve the interests of millions of consumers and advance competition in one of the most dynamic sectors of the national economy.
- FCC Urged To Ban Stations’ Discriminatory Fees, Pacts
On May 19, the American Cable Association called on the FCC to assert its authority and protect consumers by creating new retransmission consent rules designed to prevent broadcasters
from charging discriminatory fees and creating joint negotiating entities in order to further maximize their economic leverage over small cable providers.
“FCC intervention is essential to shield consumers from a broadcast industry bent on abusing its market power to gouge consumers served by small cable operators in hometown America,” said association chief Matt Polka. “If the FCC’s effort yields the kind of level playing field we hope to see, it will take pressure off retail cable rates while freeing up capital vitally needed to accelerate broadband deployment in rural communities in every state.”
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ACA’s Steve Friedman Kicks Off Washington Summit
Priorities: Comcast-NBCU Conditions, Retrans Reform
American Cable Association Chairman Steve Friedman said the trade group is fully committed to seeking appropriate conditions on the Comcast-NBC Universal merger as well as fundamental changes to the broken
retransmission consent regime put into place nearly two decades ago. "Over the next year, ACA will play a leadership role in the fight for fairness and appropriate conditions on the Comcast-NBCU merger," Friedman said. "My sense is that victory on retransmission consent is on the distant horizon, but we can see it. The ship has sailed, and it’s not turning back. We're committed to achieving relief and reform for our members."
Friedman's promising views kicked off ACA's 17th Annual Washington, D.C., Summit, the leading educational conference for small, independent cable operators seeking to interact with regulatory officials and Capitol Hill lawmakers as well as discuss the unique challenges of providing world-class communications services in rural America.
The Federal Communications Commission and the Department of Justice are reviewing Comcast-NBCU’s $30 billion transaction, the most significant media merger in a decade that has broad implications for the business operations of small cable providers. Many ACA members will compete head-to-head with Comcast-NBCU for cable and broadband subscribers and nearly all ACA members will need to acquire cable, broadcast and online content services from this new media giant on fair and reasonable terms.
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ACA Joins Large Coalition Seeking
FCC Reform Of Retransmission Consent
Joining a large and diverse coalition deeply troubled with broadcasters' egregiously unfair treatment of consumers, on March 10, the American Cable Association called on the FCC to protect pay-television subscribers and promote competition by adopting new rules that would stop broadcasters from employing several abusive practices, including the pulling of signals just prior to nationally important events in order to extract excessive compensation from multichannel video providers.
As the FCC rulemaking develops, ACA will also urge the FCC to rein in the ability of TV stations to distort competition by charging smaller cable operators much more per-subscriber for retransmission consent than they normally charge other, usually much larger providers competing in the same market.
The diverse group on the FCC petition is comprised of ACA, Bright House Networks, Cablevision, Charter, DirecTV, Dish Network, Insight Communications, Mediacom Communications, New America Foundation, Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), Public Knowledge, Suddenlink Communications, Time Warner Cable, and Verizon.
- ACA Applauds FCC’s National Broadband Plan
On March 16, American Cable Association President And CEO Matt Polka issued this statement on the FCC’s National Broadband Plan for Congress:
“The Federal Communications Commission should be applauded for preparing a National Broadband Plan that points the way toward ensuring that every American and every private and public institution are connected to the most transformative technology to come along in centuries. ACA looks forward to working with Chairman Genachowski on turning these ideas into reality.
“Based upon an initial review of the plan’s executive summary, ACA is pleased to see a number of areas where the FCC’s proposals align closely with suggestions ACA proposed to the agency. First, the plan calls for the creation of a new Universal Service Fund for wireline broadband service, called the Connect America Fund, that will be funded by reallocating billions of dollars from the USF’s existing voice service program. Second, the plan calls for new rules that ensure service providers, like small cable operators, can access infrastructure, such as poles, conduits, and rights-of-way, efficiently and at fair prices, which is particularly important for smaller providers in rural areas. Third, the plan calls for expanding the Lifeline and Link-Up programs by allowing subsidies provided to low-income Americans to be used for broadband.
“We look forward to the release of the full National Broadband Plan, where we’ll get a more complete understanding of the FCC’s recommendations for ensuring every American has access to broadband capability,” The ACA statement concluded.
- ACA Reacts To Court’s Access Ruling
On March 12, ACA President And CEO Matt Polka released the following statement on the program access ruling issued by U.S. Court Of Appeals for the D.C. Circuit:
“While we are pleased that the court recognized today that the FCC had substantial evidence to conclude that vertically integrated cable companies have the ability and incentive to withhold “must-have” programming from competitors, we maintain that the current program access rules are demonstrably ineffective for competitive pay-TV content buyers because they permit rampant, unjustified price discrimination. Moreover, the rules fail to provide for an automatic right to continued carriage during the pendency of a complaint and do not offer any rate-setting mechanisms. For these reasons, ACA asserts that program access rules will not alleviate the substantial harms that would result from the Comcast-NBCU merger, and that structural or behavioral remedies must be put in place by the FCC and the Department of Justice before that deal is approved.”