News Ticker

NAB to FCC: Exclusivity rules protect local TV from cable behemoths

The National Association of Broadcasters is telling the Federal Communications Commission that the broadcast exclusivity rules that agency is proposing to eliminate “are more essential than ever” to counter growing consolidation in the pay TV market.

“Considerable and continued consolidation in the pay TV industry fundamentally undermines any suggestion that the marketplace has changed in ways that render the current rules outdated,” the NAB said in an ex parte filed Tuesday.

FCC Chairman Tom Wheeler last week circulated an order that would eliminate the network non-duplication and syndicated exclusivity rules, which backstopped the contractual protections that TV stations have for the content broadcast in a local market.

“In this item, the commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties, as we did in the Sports Blackout Order last year. In so doing, the commission would take 50-year old rules off our books that have been rendered unnecessary by today’s marketplace,” Wheeler wrote in a blog post.

But over that time, numerous smaller and regional cable TV operators have been consolidated into nationwide mega-providers, said the NAB.  These fewer, larger firms “have much greater control over subscription-based television (to say nothing of their near total control of the broadband-to-the-home market),” according the the NAB.

As evidence, the NAB points to an analysis of top pay-tv providers compiled by Multichannel News.  In 2015, the top five cable and satellite providers control 85.5 million subscribers (assuming the Charter merger is approved.)

In 1995, the top five controlled only 33.1 million subscribers, with the top provider–Telecommunications Inc.– controlling 13.1 million.  In 1985, the top five controlled only 11.4 million with #1 Telecommunications Inc. controlling only 3.7 million.