The National Association of Broadcasters has told the FCC it should deny the proposed Charter-Time Warner Cable-Bright House merger, and any other pay-TV merger for that matter, unless it reforms its broadcast ownership rules and, in any event, should suspend the review until it completes the overdue quadrennial rule review.
That came in a petition to the FCC Monday that demonstrated the gloves are clearly off in the battle between broadcasters and cable, with NAB slamming pay-TV consolidation in general or at least the FCC's failure to extend to broadcasters similar deregulatory opportunities.
“While essentially forbidding the joint sale of advertising time by two TV stations in the same market, the Commission has permitted all major pay-TV providers – large cable operators including TWC, satellite TV operators and the telcos – to join forces to create a single platform for local and national advertisers." the petition said.
"If the Commission fails to reform broadcast ownership rules, some of which are over 70 years old, to better reflect current competitive realities, then the FCC should deny the proposed merger," NAB said.
“While failing to meet its statutory requirements with regard to ownership of broadcast outlets, the Commission at the same time has approved a series of mergers resulting in a multichannel video programming distribution (MVPD) industry highly consolidated at the local, regional and national levels,” NAB said. “That industry will only become more concentrated through the proposed merger to combine the fourth, seventh and tenth largest MVPDs in the country."
"Permitting the Charter-Time Warner Cable-Bright House marriage would allow the top four pay-TV providers to control 79 percent of the nationwide market, measured in terms of subscribers, and the top three alone would control two-thirds of the video delivery universe."
FCC chairman Tom Wheeler has signaled the overdue review would be completed sometime in 2016, but his successful push to tighten regulations on joint sales agreements has not given broadcasters much hope that the result of that review will be deregulatory moves—like loosening duopoly rules or eliminating cross-ownership rules—that they argue are necessary to broadcasters' competitiveness in a world of merged pay-TV providers.
Randolph May, president of free market think tank, The Free State Foundation, did not see the linkage between the deal and broadcasters deregulatory concerns, legitimate as they might be.
"The NAB's call to suspend the review of the Charter-TWC-Brighthouse proposed merger should be quickly dismissed," he told B&C/Multichannel News. "I've long been supportive of reforming the outdated broadcast ownership rules, but the Commission's failure to do so thus far is no reason to argue that the agency should not fulfill its responsibilities to review proposed transactions on a timely basis in what nearly everyone concedes is a dynamic marketplace. As it is, the FCC takes too long to review mergers without any suspensions or stops of the so-called 'shot clock.' While it looks to me like merger proposal is more likely than not to enhance overall consumer welfare, given the market's competitiveness, NAB is free to argue otherwise on the merits."