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Retransmission Consent

What is Retransmission Consent? The U.S. Congress has authorized broadcast stations, such as those that air ABC, NBC, CBS, and FOX programming, to grant or deny permission (provide "consent") for a cable television operator to "retransmit" the signal to its customers. In order to acquire consent the owner of the television station will demand some form of compensation from the cable operator, which is typically re-negotiated every three years. 

Frequently, a broadcaster demands the smaller cable operators pay an exceptionally higher per-customer fee than other larger operators in the same market. Broadcasters charge smaller cable operators retransmission consent fees as much as twenty times more than what the largest distributors pay. There is no justification for the price discrimination faced by small cable operator because the retransmission is costless for the broadcast station owner. The burden to a broadcaster of having its signal carried on a large system or a small one is identical.

Cable operators who refuse to accept the higher charge (as it frequently would result in higher rates for customers) face retaliation from the broadcaster - a dropped signal and the refusal to allow a cable operator to deliver its programming to customers.

Making matters worse, federal rules and regulations hinder small cable operators serving small and rural markets to offer broadcast signals from neighboring television markets, even when the neighboring broadcast is willing to offer the same network programming at a more reasonable rate.

How Does Retransmission Consent Harm Consumers? When independent cable operators are dealt disproportionally higher per-subscriber fees to broadcast a signal, the result is increased costs for consumers and reduced competition by undercutting smaller companies' ability to compete on price. Notably, independent cable providers often have to redirect investment that should go towards increasing system capacity and improving infrastructure for broadband to instead line the pockets of big broadcasters and programmers, putting already underserved markets even further behind the Digital Divide.

What is ACA Doing About Retransmission Consent? Currently, the FCC is reviewing whether revisions to the wholesale cable programming and retransmission consent rules would provide consumers with more choice and value. ACA has presented the FCC with multiple filings to demonstrate how the current marketplace harms both independent cable operators as well as consumers. In addition, ACA is formally supporting a "quiet period" between broadcasters and cable operators during the coming round of retransmission consent negotiations. ACA is urging the FCC to prevent broadcasters from removing their signals from an operator's system to avoid public confusion surrounding the coming digital TV transition in February 2009.

ACA and its members regularly brief FCC Commissions and their staff, as well as Members of Congress, to encourage prompt resolution in favor of independent cable operators. Our fight will continue until ACA members receive the relief they need from wholesale tying and bundling abuses at the hands of broadcasters and programmers.

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