By Matthew M. Polka
October 5, 2017 at 5:00 am ET
The Federal Communications Commission may soon change its rules limiting how many television stations one entity can own. This may not sound like much, but it could mean big increases in everybody’s cable and satellite TV bills.
Four of the most powerful names in TV are brands with which almost everybody is familiar: ABC, CBS, NBC and Fox. Almost every TV market in the country has stations affiliated with all four networks. Routinely the local ratings champions, the “top four” have been providing viewers with local news and popular national programming for decades. While some still use an antenna to receive their local TV stations, most broadcast TV viewing occurs in cable or satellite TV homes.
A burning issue for the broadcast industry these days is a debate over station ownership. Over the last five years, station groups have bought up top-four stations in markets where they don’t already own stations. This consolidation has transformed broadcasting from a locally owned, locally operated business into one dominated by super-sized corporate station groups. Many of these now run stations that reach 50 percent or more of the country’s audience.
Yet even this isn’t enough for some broadcasters. These groups are no longer content to own just one top-four station in a single market. They now want to own two, three or even four of these stations in a single market. Why own, for example, only the Fox station in Washington, D.C., when you can own the Fox and CBS stations, or the Fox and NBC stations?
Congress and the FCC long ago decided that local station ownership is too important to be left to broadcasters alone to decide. For decades, the FCC has prohibited ownership of more than one top-four station in a market. But the agency may soon eliminate or relax this top-four rule. If the FCC does so, a single entity will end up owning at least two top-four stations in most markets.
If this happens, cable and satellite prices will go up. Don’t take my word for it: The FCC itself made this very finding three years ago when it prohibited non-commonly owned top-four stations in a market from jointly negotiating for cable or satellite TV carriage. It found that when, for example, a CBS and a Fox station in a market can negotiate for carriage together, they can charge prices as much as 40 percent higher than they otherwise would. A bipartisan Congress later ratified and broadened this prohibition. Of course, if a big-four station can increase prices when it negotiates on behalf of another such station, it can do exactly the same thing when it owns the other station. So if the FCC eliminates or relaxes its top-four rule, prices will go up.
For consumers who subscribe to cable or satellite TV, the prices they pay are already too high. The fees stations charge pay-TV providers have risen by 40 percent in each of the the last three years. The rise is projected to continue, with analyst SNL Kagan saying retransmission consent fees could almost double in the next five years to $11.6 billion. TV stations often rely on signal blackouts — there were more than one hundred in 2016 alone — to ensure they receive top dollar. If allowed to own two top-four stations in a market, TV stations would be handed a gift to jack up fees and ratchet up the blackouts, with consumers paying the price no matter what.
Subscriber bills are already too high. And blackouts are already too common an occurrence. The last thing the FCC should be doing is making things worse. It should leave the top-four rule in place.
Matthew M. Polka is president and chief executive officer of the American Cable Association.
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