Two national cable industry groups are fighting Forum Communications’ request for a rare waiver to combine ownership of two top-four stations in Fargo.
NTCA – The Rural Broadband Association has filed a petition to deny the sale of FOX affiliate KVRR/15.1, while the American Television Alliance has filed an informal objection. Their arguments largely center around a potential increase of retransmission consent fees passed on to consumers if the deal is approved.
As previously reported here, Forum is seeking a waiver of federal ownership rules to allow the combination of KVRR with its ABC affiliate, WDAY-TV/6.1. Unlike other big-four network combinations using subchannels or low-power stations, including Gray TV’s combination of a full-power NBC affiliate and a low-power CBS affiliate in Fargo, the proposed transaction would see Forum own two full-power licenses that rank in the top four.
NTCA represents multichannel video programming distributors, including some in the Fargo market. It says they “will suffer injury in the form of increased retransmission consent fees if the Commission were to approve the transaction.”
NTCA says the proposed Fargo transaction is different than the only such waiver ever issued, which was in Sioux Falls, because Sioux Falls had four owners of major network affiliates prior to the transaction while Fargo currently has three.
NTCA also says that in the Sioux Falls situation, the station that was sold was said to be in danger of closing its news department, while no such claim was made in the Fargo request.
The Applicants have failed to demonstrate that the harms associated with increased consolidation in the Fargo television market are outweighed by any real-world benefits of this transaction or that there are exceptional circumstances that justify its approval.
NTCA petition to deny
The ATVA, which represents cable and satellite providers, makes similar arguments, saying Forum has not addressed the potential impact on retransmission consent rates or shown how the benefits will outweigh higher consumer prices. It says rather than allowing Forum to have a second affiliation to compete with Gray, the FCC should close the loophole that allowed Gray to have two affiliations.
The truth is that duopolies created via loopholes harm entities like Forum, which find it harder to compete in the advertising market without their own duopolies. This is a reason to close loopholes in the first place, as we have argued elsewhere.
ATVA informal objection
Forum responded to the filings on March 7, saying that the NTCA and ATVA are largely recycling old arguments about retransmission consent fees that have already been rejected. Forum says the evidence actually supports the conclusion that MVPD’s have greater bargaining power than Forum, a family-owned company with stations in only a few markets.
ATVA and NTCA seem to have Forum confused with publicly traded companies that have a nationwide or region-wide footprint. Forum asks the Commission to consider the proposed assignee party who stands before the Commission requesting grant of the Fargo Application and request for waiver: Forum owns a grand total of two full-service television stations in two smaller markets in North Dakota (DMAs #114 and #141) and here seeks to add a second full-service station in Fargo and a third in Duluth-Superior (DMA #140). Forum does not have the heft to exact meaningful leverage over massive MVPD companies who serve the majority of subscribers in Fargo.
Forum opposition to petition to deny and reply to comments
Forum repeated its earlier commitments to adding 19.5 hours of local news and programming per week on KVRR, to move programming currently seen only on WDAY-DT3 to KVRR’s primary channel available via satellite, and to enhance KVRR’s technical operations, sales presence, and overall service, among other thigs.
This article was originally posted on March 1, 2022, and was updated May 3.