Shirley Bloomfield, CEO of NTCA – The Rural Broadband Association and NRECA CEO Jim Matheson were among five leaders of rural groups favoring retransmission consent relief in a letter to key Congressional leaders (PDF) yesterday. The letter calls for language in the Satellite Television Extension and Localism Act (STELA) to encourage greater use of “buying groups” to improve rural video providers’ negotiating positions with broadcast station groups. Congress currently is debating reauthorization of STELA, which was last authorized in 2014.
“Such an approach would help limit video bill increases for millions of rural Americans and allow the video providers serving them to invest more in broadband,” the associations said.
Video programming buying groups, such as NRTC's TelcoVideo, negotiate contracts for video programming with large video rights holders on the behalf of rural video service providers nationwide. “This marketplace mechanism benefits all concerned: National programmers especially benefit from working with a buying group because it reduces their transaction costs of dealing with small and medium-sized video operators so that they are comparable to the transaction costs of dealing with a single large provider,” the letter said. “Members of buying groups benefit because they receive lower rates [sometimes significantly lower] than they would receive through direct deals.”
The letter lists instances when buying groups dealing with broadcast station groups were able to reach fair retransmission agreements. However, some broadcast groups will not deal with rural buying groups and current FCC rules “provide no recourse” for the buying groups, they said.
Along with Bloomfield and Matheson, executives signing the letter included Matthew Polka, president and CEO of ACA Connects – America’s Communications Association; Genevieve Morelli, president of ITTA – The Voice of America’s Broadband Providers, and Derrick Owens, VP, Government and Industry Affairs, WTA – Advocates for Rural Broadband.