The NAB has slammed the American Cable Association for its request to the FCC to restrict bundling by programmers, arguing that granting the request would have “clear and extremely unfortunate exclusionary effects” and lead to less diversity on pay-TV systems.
In an ex parte letter to the FCC from lead NAB attorney Rick Kaplan, the leading trade association for radio and TV stations took the ACA to task for asking the Commission to restrict bundling – including the inclusion of a “Spanish-language channel for cable systems with very few Spanish-speaking customers” and an “urban-interest channel for rural cable systems.”
In the NAB’s view, the ACA request would have “clear and extremely unfortunate exclusionary effects.”
ACA President/CEO Matthew M. Polka responded, saying, “For broadcasters to suggest that ACA’s position promotes “segregation … according to race and ethnicity” is unfortunate and highly misleading.”
Note: This story was updated at 3:15pm ET on Sept. 1 to include comments from ACA President/CEO Matthew M. Polka.
RBR + TVBR OBSERVATION (in full below, for subscribers): The NAB makes some excellent points, and the ACA, while honest in its assessment that bundling leads to higher household bills, is indeed treading on thin ice here. The ACA should begin to work with the cable networks on a cost solution, so that cable bills remain fair to the subscriber while channel choices are not impaired.
“While the NAB has repeatedly demonstrated that ACA’s more general claims about bundling are unfounded, ACA’s latest request is extremely disturbing and highlights how Commission interference in programming negotiations is almost certain to result in less diversity on pay TV systems,” Kaplan writes.
“More specifically, ACA’s request would have clear and extremely unfortunate exclusionary effects, and should concern the Commission that its otherwise good intentions could be exploited by pay TV providers to target their programming channels in a manner more profitable for them but less diverse for consumers,” Kaplan adds.
The NAB, as examples of what could happen, suggests that channels targeting Black viewers such as Bounce TV or TVOne would be excluded from cable systems that claim to have a miniscule number of Black subscribers. Similar examples were made of channels targeting Asian-Americans and Hispanics who prefer to consume content in Spanish.
“There is simply no reason for the Commission to adopt policies ensuring that niche programming only reaches a narrow audience,” the NAB’s Kaplan writes, arguing that the exclusion of such channels would “leave us a less informed and educated nation.”
The ACA was quick to respond, slamming the NAB for “using highly inflammatory references to segregation based on race and ethnicity.”
In a statement provided to RBR + TVBR, ACA President/CEO Matthew M. Polka said, “For broadcasters to suggest that ACA’s position promotes “segregation … according to race and ethnicity” is unfortunate and highly misleading. ACA made a simple point: Overall diversity increases when individual, small cable operators can choose the programming that best serves their particular local audiences (like independent Spanish-language programming in Puerto Rico). Overall diversity decreases when big conglomerates can force their national networks upon local audiences that may not want them (like the Esquire Network in some rural areas). Nothing about this position should surprise broadcasters — who, after all, have a rule allowing them to reject unwanted network programming.”
The ACA has a much different view on the issue of Wholesale Bundling than the NAB.
It states on its website, “According to the Federal Communications Commission (FCC), the typical American consumer is only interested in watching 17 cable channels. Typically referred to as ‘highly desired’ programming, these channels may include ESPN, USA, Discovery and MTV. However, for a cable operator to provide any one of those channels, the programmer or media conglomerate that owns the channel pressures the operator to carry and distribute several additional channels also under its ownership — and not just on any of the cable packages that the provider offers, but often on the most basic and widely distributed tiers. These operators are coerced into these deals without regard to consumer interest or its impact on household budgets.”
The ACA then states that results in charges “that are ultimately passed on to customers in the form of higher cable bills … 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.”
RBR + TVBR OBSERVATION: The NAB makes some excellent points, and the ACA, while honest in its assessment that bundling leads to higher household bills, is indeed treading on thin ice here. Bounce TV may be viewed as a “urban-interest channel for rural cable systems,” but its programming may still be of interest to all viewers in those areas. The same can be said about channels targeting Spanish-speaking Hispanics, who are now found across the U.S. In fact, first-generation Hispanics who rely on Spanish-language channels have settled in communities across Iowa, Nebraska, Kansas, Indiana, and the Carolinas in recent years. Should the FCC agree with the ACA, it would be a tremendous setback for cable systems and give DirecTV and Dish network, not to mention OTT platforms, a win. As the American mainstream becomes more multicultural by the day, the ACA should begin to work with the cable networks on a cost solution, so that cable bills remain fair to the subscriber while channel choices are not impaired.
