It appears in a 10-page filing submitted in response to a FCC Media Bureau docket on “empowering local broadcast TV stations to meet their public interest obligations” by exploring the market dynamics between national programmers and their affiliates.
But, it doesn’t have as much to do with the increasingly frayed relationship between the “Big Four” networks and their affiliates as it has to do with saving a broken cable TV business.
The filing expresses how DirecTV “cannot speak specifically to the negotiations between networks and their affiliates.” However, DirecTV can speak of its own experience with the “Big Four” networks and how they are “vertically integrated” today into OTT platforms. “They therefore now have an incentive to dilute the value of content they provide other
distributors in favor of their own direct-to-consumer businesses,” DirecTV asserts.
As Disney+, Peacock, and Paramount+ continue to grow and FOX One seeks to gain traction, broadcast consolidation will only exacerbate the problems of vertical integration, the DBS provider adds.
And there’s this refrain from DirecTV: Increased retransmission consent rates will force MVPDs like DirecTV to raise prices to consumers. Why? That’s a topic ripe for debate, as CEO Bill Morrow’s salary hasn’t been publicly disclosed since TPG took DirecTV private with its acquisition from AT&T. In 2010, his total compensation was $11.7 million based on a salary as Clearwire CEO of $726,923, RCR Wireless News reported at the time.
Yet the biggest eye-opening statements from HWG LLP attorneys Michael Nilsson and William Wiltshire III in the ex parte brief deal with DirecTV’s desire for “a broader, more holistic approach to the entire network-affiliate MVPD ecosystem.”
They look back on a 11-year-old bipartisan proposal from Senators Jay Rockefeller (D-W. Va.) and John Thune (R-S.D.) that would allow under statute a DBS provider or MVPD to bring its customers over-the-air TV stations on an a la carte basis — rather than offering every broadcast channel in a basic tier.
The “local choice” argument was first raised by Cincinnati-area MVPD Altafiber, presently in a battle with Nexstar over retransmission consent fees associated with WDTN-2 in Dayton and NewsNation, the company’s cable TV network. Under that proposal, broadcasters would set their own retransmission consent price and MVPDs would set the retail
price of each channel based on that price, allowing viewers to choose which stations they want to pay for.
The NAB and broadcast TV station owners successfully prevented that proposed legislation from getting approved. Now, DirecTV wants the Trump Administration through FCC Chairman Brendan Carr to revisit something killed in the days of President Obama.
“Largely removing the MVPD from the affiliate-viewer relationship would both
empower consumers and avoid blackouts that deprive viewers of broadcast content,” DirecTV believes. Quoting the 2014 failed bill, it continues, “When it is time for retransmission consent agreement renewals, operators can take a hands-off approach on rates and let broadcasters justify their fees to consumers; if a consumer does not agree with a station’s value based on the retransmission consent fee the broadcaster dictates, it need not purchase that station’s signal.”
Could such a plan see the light of day today? DirecTV certainly hopes so.
“There may be variations of this proposal that are worth considering as well,” the DBS provider says. “The Commission has many levers at its disposal to drive consensus and
change, and should consider using them all.”
