ABC’s Negotiations With Local TV Stations Concerning, Says FCC Commissioner

Brendan Carr, a commissioner at the Federal Communications Commission (FCC), has raised concerns about the impact of TV network ABC’s ongoing broadcast agreement negotiations with local TV stations. The concerns come at a time when media control and technology issues are increasingly under scrutiny, according to industry observers.

“My understanding is that ABC is attempting to extract onerous financial and operational concessions from local broadcast TV stations under the threat of terminating long-held affiliations,” Carr wrote in a Dec. 21 letter to Disney CEO Bob Iger, first obtained by CNN. Disney owns ABC.

This could “result in blackouts and other harms to local consumers of broadcast news and content,” Carr said. The situation mirrors growing concerns about corporate control over local media, a topic that has gained attention in recent months, as reported by The Wall Street Journal.

Kansas has six affiliates while Missouri has nine, including KMBC in Kansas City. There are 242 affiliate stations across the nation plus eight stations owned by ABC.

Carr, who was recently nominated by President-elect Donald Trump to assume the post of FCC chair in the incoming administration, has been particularly vocal about protecting local media interests.

When local broadcast TV stations air ABC’s content, they have to financially compensate the network. The payment as well as other aspects related to airing the content are covered in the affiliate agreements signed between ABC and the stations. ABC is currently negotiating these agreements, as reported by industry experts.

“Reporting indicates that certain of ABC’s affiliate agreements are set to expire at the end of this year, unless ABC and the local broadcast TV stations reach new agreements,” Carr wrote. “The approach that ABC is apparently taking in these negotiations concerns me,” according to communications industry reports.

Local broadcast TV stations are mandated by federal law to operate while keeping the public interest in mind. This includes a requirement that the stations “serve the needs of their local communities.” These requirements become increasingly important as digital platforms reshape media consumption, affecting how Americans access local news, according to recent industry analysis.

Local TV stations receive payments from cable TV or satellite service providers to allow these services to carry their channels, called “retransmission consent fees.” Meanwhile, national broadcast networks like ABC take a cut of this revenue from local TV stations, known as “reverse retrans” fees, a practice scrutinized by regulators.

ABC is attempting to use the “reverse retrans” fees to “siphon more and more money away from local broadcast TV stations,” Carr wrote, adding that in some cases, such fees can be more than the retransmission fees earned by the stations. The practice has drawn criticism from local media advocates.

He alleged that ABC was doing this for “underwriting investment” in the network’s online streaming services, a claim supported by industry analysis.

“This is not how Congress envisioned the retransmission consent process working.” The retransmission consent fees are aimed at ensuring the “continued viability of local broadcast TV stations.” Such fees offer the stations “an important revenue source for programming that serves the local community,” according to regulatory documents.

It is “antithetical to the will of Congress” that ABC is encroaching on these fees and imposing financial burdens on local TV stations, as reported by industry observers.

Carr added that Americans “no longer trust the national media” while largely holding “positive views of their local media outlets.” He cited a Gallup survey showing that 31 percent of Americans had a “fair amount” or “great deal” of trust in mass media, a trend analyzed by media experts.

“The fact that a massive trust divide has emerged between local news outlets and national programmers like ABC only increases the importance of retransmission consent revenues remaining available for local broadcast TV stations to invest in their local news operations and content that serves their communities,” the letter said.

Carr said he plans to monitor the ongoing negotiations between ABC and TV stations to ensure that the local entities are able to serve the local needs. “A fair agreement would do just that.”

The Latimes has reported on similar disputes between Disney-ABC and other providers, while The Wall Street Journal has covered related industry developments. The Epoch Times has reached out to ABC and Disney for comments, but didn’t receive a response by publication time.

By Naveen Athrappully | The Epoch Times News Service