ACA Members Believe Retrans Fees Will Rise 88% by 2020

Survey says small ops paying $11 per sub, per month in 2017
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Retransmission consent fees are expected to rise an average of 88% by 2020 for small cable operators, according to a survey by the American Cable Association.

ACA, long an opponent of retrans regulations, surveyed its own membership and found that on average, they paid about $11 per month per subscriber in retransmission consent fees in 2017. That amount is expected to rise to $19 per subscriber per month by 2020.

Nearly a quarter of those surveyed will see a drastic jump of at least 100% in fees in the next three years, and in one case that increase is expected to be 302%.

In response, the National Association of Broadcasters cited Kagan data that shows the pace of retrans increases have slowed significantly overall in the past several years from about 65% in 2010 to 10% in 2018. And they pointed to other Kagan data showing that retrans is still a small part – about one-sixth – of overall programming costs. In addition, broadcast ratings generally exceed that of cable channels, the NAB says.

But the gist of the ACA survey is that small operators copntinue to bear most of the burden of retrans increases. According to the organization, retrans fees are the fastest growing part of customers’ cable bills, adding that in some cases, cable subscribers across the country could see up to $15 in retrans fees added to their monthly cable bills by 2020.

“This is distressing,” said ACA president and CEO Matt Polka in a statement.  “Corporate broadcasters have become increasingly aggressive over the years in charging for retransmission consent, and it’s clear that they have no reservations taking escalating amounts of money from consumers to line their pockets.”

Related: FCC: Expanded Basic Cable Price Increased 3.4% in 2015

ACA included comments from some of its membership about the impact of retrans on their operations.

For example, Citizens Telephone & Cable president Brian Cornelius claimed under his current retrans agreements, charges will rise about 105% over the next three years, or about 50 times the rate of inflation. Citizens offers service in Higginsville, Corder and Mayview, Missouri.

“It’s crazy and unsustainable,” Cornelius said in a statement, “If gas prices did that, a tank of gas would go from about $30.00 to about $70.00.”

In December 2017, Citizens was paying $8.53 per subscriber per month in retransmission fees. This month broadcasters increased those fees to $14.65 per subscriber per month — a 72% increase.

They also refused to allow Citizens Telephone & Cablevision to offer a broadcast-free cable package, which would have allowed customers to opt to use an antenna in an effort to reduce their rates, according to the ACA.

Harrisonville Telephone Co., which operates in Monroe, Randolph and St. Clair counties in Illinois, said this year it has experienced retrans rate increases of more than 100%. In 2016, the company claims it was forced to carry multicast channels or be in direct violation of the local broadcast retransmission agreement.

“The corporate broadcasters are out of control,” Polka said in a statement. “No other industry operates this way.  No other sector would get away with such massive price increases in just three years.  Why is this okay?  Quite simply, it is not, and consumers should not have to pay the bill for something Washington should have changed years, if not decades, ago.”

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