NCTA To Levin: Retransmission Raises Prices, Hurts Consumers

The National Cable & Telecommunications Association told the Federal Communications Commission Dec. 16 that both common sense and a study it recently commissioned conclude that if broadcasters boost retransmission fees, they will "inevitably" raise consumer costs and lead to consumer harm. The letter was in response to the FCC's public request to the National Association of Broadcasters for information backing up its assertion that over-the-air broadcast signals were a governor on cable and satellite prices, and for NAB's reaction to the "alternate view" that retransmission fees boost cable and satellite costs to consumers. The study, by Jonathan Orzag, Michael Katz, and Theresa Sullivan, argues that in addition to higher sub fees, the current retrans system leads to "lower consumer welfare" because distributors will have less to spend on other services. Other problems it says, are loss of TV station signals when negotiations break down, and potential problems when stations negotiate for stations with which they have leveraged marketing agreements (LMAs) in the same market.