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MVPDs: Specific Gannett/Belo Spin-Offs Are Not In Public Interest

ACA, TWC, DirecTV Fire Back in Reply Comments to FCC 8/21/2013 10:32 AM Eastern

MVPDs seeking to block the spin-off TV station sales in the Gannett/Belo merger told the FCC Tuesday that higher prices and blackouts are transaction-specific harms that the FCC can and should address.

That came from the American Cable Association, Time Warner Cable and DirecTV in reply comments on their petition to deny or condition the deal on disallowing coordinated retrans negotiations.

There are stations in five markets--Phoenix; Louisville, Ky.; Tucson; Portland, Ore.; and St. Louis--that would violate the FCC's newspaper/broadcast crossownership and local ownership cap rules if Gannett were not turning around and selling them to operating companies headed by former Belo group chief Jack Sander, and Ben Tucker, former head of the Fisher station group.

ACA and company argue that Gannett's plans to spin off, but still provide some services to, those stations is not in the public interest and should not be allowed. "The Applicants’ efforts to sanitize the anticompetitive conduct at issue by referring to Gannett as a mere “negotiating agent" doesn't cut it, the MVPDs argue, pointing to FCC analysis that coordinated negotiations among more than one top four station increases prices.

In their response to the petition, Gannett and Belo had argued that the spin-offs were within FCC rules and that the MVPDs were trying to hold a referendum on those rules and coordinated retransmission consent negotiations via the FCC's deal review process, a referendum they said belonged in the FCC's still-open retrans proceeding.

But ACA and company said they were not looking beyond the deal. Instead, they said, the broadcasters were "seek[ing] to avoid scrutiny of their anticompetitive agreements to coordinate retransmission consent negotiations by manufacturing procedural objections to the Petition."

ACA says they are not asking the FCC to address the broader issue of retrans reform, which they acknowledge will be necessary for comprehensive reform. But that is a separate issue from whether these specific Gannett/Belo station transfers are in the public interest. "The sharing agreements at issue threaten concrete, transaction-specific harms, as coordinated retransmission consent negotiations between and among Gannett, Sander, and Tucker would harm competition and consumers," they say.

September