Topeka ‘Triopoly’ Approval Rankles ACA

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Washington — The Federal Communications Commission’s
Media Bureau signaled to small cable operators
last week that they must wait for the full commission to
finish its retransmission-consent rulemaking to find out
just how it views virtual duopolies and triopolies when it
comes to retransmission negotiations.

The commission approved the assignment of the license
for ABC affiliate KTKA-TV in Topeka, Kan., to PBC
Broadcasting from Free State Communications, rejecting
a petition to deny the deal. The commission said the sale
was in the public interest and that the applicants were fully
qualified to hold their licenses.

The American Cable Association had petitioned to deny
the sale, saying it created a virtual triopoly that was not
in the public interest, particularly by consolidating potential
retransmission negotiation leverage in the market.

A denial was a long-shot from the outset but gave the
petitioners a chance to spotlight their view that joint service
and operating agreements are loopholes in the media
ownership rules large enough for stations to drive unfair
retransmission deals through.

ACA had argued that because Topeka’s NBC affiliate
and Fox affiliate were owned by New Vision Television,
which has shared services agreements with PBC Broadcasting
in Youngstown, Ohio, and Savannah, Ga., it was
concerned that the sale would create a “virtual triopoly”
in Topeka and “coordinate” retransmission negotiations
for three of the Big Four broadcast affiliates.

PBC said ACA was raising broad policy issues appropriately
addressed elsewhere. The FCC appeared to agree.

“We will not address here the substance of the retransmission
consent proceeding, and we decline to reach a
decision that would effectively pre-judge the outcome of a
pending rulemaking in favor of one of the parties that petitioned
to commence it,” the Media Bureau said in a letter
to lawyers representing the stations, and to the ACA, explaining
why the license transfer was approved.

ACA is a member of the American Television Alliance,
a coalition of cable operators, satellite-TV providers, telephone
companies and other multichannel-video providers,
whose petition prompted the retransmission proceeding.

Matthew Polka, ACA president, was disappointed. “That
the FCC has given a government green light to a private
company bent on using the public airwaves to engage in
collusive behavior is an affront to all Americans, who expect
the FCC to protect consumers and competition,” he
said in a statement. “The FCC said the deal will serve the
public interest, but the FCC did not explain how the deal
is in the public interest, and the buyer of the station never
even provided evidence in its filings to support a public
interest claim.”

The ATVA said, “This is just the latest example of why the
FCC and Congress must reform outdated retrans rules to
protect consumers.”

An FCC spokesman said the commission was still vetting
retransmission comments, which were due June 27.