Mediacom CEO Rocco Commisso wants the FCC to do something about rising retransmission fees and the blackouts local broadcasters use to keep the costs going up.
In a letter to FCC Chairman Tom Wheeler, Commisso lamented the Commission’s inaction as retransmission fees inflate, including another $3 billion per year increase during Wheeler’s tenure as chairman.
“PayTV costs are significantly higher in the U.S. than anywhere else in the world largely because the average monthly wholesale programming costs paid by most MVPDs have grown to over $45 per subscriber. To put these wholesale programming costs in their proper perspective, $45 is roughly the monthly retail price ISPs charge for their flagship broadband product,” Commisso wrote.
Commisso goes on to say that retransmission fees, at their current growth rate, are essentially doubling per station every two or three years. He warns that fees could reach $29 billion a year for MVPD customers collectively.
With that trajectory in mind, Commisso sees the options for MVPD boiling down to either no longer carrying local broadcasts that elect retransmission consent, raising pay-TV prices to levels “unaffordable for tens of millions of consumers,” or getting out of the video business altogether.
The final option, Commisso says, will “necessarily require broadband customers to bear a larger share of network costs.”
“These choices result in a lose-lose-lose outcome for the American public,” Commisso wrote.
Mediacom, the United States’ eight largest cable operator, is petitioning the FCC to limit local broadcast stations from enforcing blackouts unless that station provides a free over-the-air or streaming signal to at least 90 percent of the relevant market.
The company says that there have been more than 400 blackouts since 2010 and that they typically end with MVPDs agreeing to an “extortionate rate increase that then compounds forever and is ultimately paid by consumers.”
In addition to limiting blackouts, Mediacom urged the FCC to eliminate network exclusivity; require a cost-based justification for discriminatory retrans prices and terms, and mandate rate transparency so that distributors and consumers alike can make more informed decisions; and start the required good faith rule review and commit to propose within 120 days specific rule changes that will make a meaningful difference.
Mediacom also asked the FCC to use its “bully pulpit” to get both broadcasters and MVPDs to accept a moratorium on broadcast blackouts and a 10 percent ceiling on price increases for renewals.
The American Cable Association (ACA) backed Mediacom and joined it in pushing the FCC for new rulemaking regarding retransmission reform.
“The concerns expressed by Mediacom CEO Rocco Commisso are shared by hundreds of members of the American Cable Association, and ACA applauds this filing. The record is clear: The FCC needs to update its rules governing retransmission consent to ensure consumers are protected from ever-increasing retransmission consent fees and ongoing TV station signal blackouts,” ACA CEO Matthew Polka said in a statement.