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Broadcasters Want FCC to Investigate ‘Collusive’ Ad Sales By Pay TV Operators

As FCC chairman Tom Wheeler seeks to limit TV stations from jointly selling advertising time, broadcasters are hitting back at the competition, asking federal regulators to look at the “collusive” advertising practices of cable, satellite and telco pay TV operators.

The National Assn. of Broadcasters, in a filing on Wednesday, pointed to a company called NCC Media, in which multiple pay TV providers in a market hire a single sales employee to sell local and national advertising that then appears on a local cable system, or satellite companies like DirecTV and Dish, or telecom providers like Verizon FIOS and AT&T U-Verse.

“We believe that the collusion in the pay-TV advertising business deserves better oversight from the FCC,” Gordon Smith, the president and CEO of NAB, said in a statement. “This deeply troubling practice would appear to allow the largest pay-TV companies in the country to game the advertising sales market and set above-market ad rates for local and national businesses.”

Wheeler is proposing limits on the ability of TV stations in the same market to enter into joint sales agreements, which he argues is a loophole that allows station groups to get around media ownership caps that prevent an entity from owning two stations in small- and medium-sized markets.

NAB is opposed to Wheeler’s plan, and has argued that such agreements help stations better compete with the growing advertising sales forces in pay TV and Internet media.

In its filing, NAB included a brochure from NCC called “The Essential Guide,” in which it says that “leading cable operators have significantly expanded local market ad penetration, by incorporating DirecTV, Verizon FIOS and AT&T U-Verse subscriber homes into their offerings.” NAB cited Time Warner Cable among the companies.

Update: Michael Powell, president and CEO of the National Cable and Telecommunications Assn., said in a statement, “NAB’s latest attack is an unfortunate and desperate attempt to divert attention from examination of discrete broadcast ownership issues.  This collateral attack on pay TV providers should be seen for what it is — a transparent stunt to muddy the waters and confuse the issue.”

 

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