WASHINGTON, D.C. -- The Federal Communications Commission should hold its review of the proposed merger between Charter Communications, Time Warner Cable and Bright House Networks in abeyance until it completes the long-delayed 2010 and 2014 quadrennial reviews of broadcast ownership rules, NAB said in a petition filed with the Commission today. 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, said the petition.
“The FCC’s has repeatedly failed its congressional mandate to review and update broadcast ownership rules while, on the other hand, approving massive consolidation amongst pay-TV providers,” said NAB President and CEO Gordon Smith. “The Commission should fulfill its statutory obligation so it can better factor in the effect another combination of behemoth cable companies will have on local broadcast stations and the millions of viewers who rely on our service.”
Under the Telecommunications Act of 1996, the FCC is obligated to complete a review of its broadcast ownership rules every four years, and repeal or modify those rules that are no longer necessary in the public interest as the result of competition. The Commission failed to complete its 2010 quadrennial review on time and announced it was combining that review with its 2014 quadrennial review, which the FCC has scheduled to complete in 2016.
“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,” said the petition. “That industry will only become more concentrated through the proposed merger to combine the fourth, seventh and tenth largest MVPDs in the country. For example, if the pending merger is approved, then the top four MVPDs will control 79 percent of the nationwide MVPD market, measured in terms of subscribers, and the top three alone, according to SNL Kagan, “will control two-thirds of the video delivery universe.”
The consolidation of the pay-TV industry has put local TV stations at a competitive disadvantage and outdated ownership rules have prevented broadcasters from achieving the economies of scale and scope that MVPDs enjoy. 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.