April 21, 2022 – Representatives from the ABC Television Affiliates Association, the CBS Television Network Affiliates Association, the FBC Television Association, and the NBC Television Affiliates (the Four Affiliates Associations) recently met with Federal Communications Commission (FCC) Commissioner Nathan Simington and his staff.[1]

During the ex parte meeting, the Four Affiliates Associations “discussed the state of the video programming marketplace,” as well as how changes in that marketplace have threatened the Associations’ advertising and subscription revenue streams. First off, the Four Affiliates Associations explained that “the growing dominance of Big Tech companies like Google, Facebook, and Amazon in the advertising marketplace and the resulting declines in ad revenues available to local broadcasters.” They provided the following description of the situation:

These large tech platforms have dramatically changed how many Americans find and consume news content. Today, significant numbers of Americans regularly get their news from entities such as Facebook and YouTube, although much of that news content is produced by local broadcasters, whose mission—unlike that of Big Tech—is to serve their local communities. As tech platforms attract growing numbers of news consumers, advertisers unsurprisingly turn to Facebook, Google, and Amazon, rather than local broadcasters, to reach those audiences, and the Big Tech companies capture an ever greater share of U.S. advertising revenues. Still, the Big Tech companies do not fairly compensate the local broadcasters who produce the news content that draws viewers to their platforms.

Ultimately, the Four Affiliates Associations argue that “the Big Tech platforms should compensate local broadcasters fairly for distribution of the broadcasters’ valuable news content on their platforms.”

Next, the Four Affiliates Associations pointed out “the lack of regulatory parity between broadcasters and Big Tech companies,” such as the differences in political advertising rules. They explained that broadcasters are subject to numerous political advertising rules, while Big Tech platforms are not subject to the FCC’s political advertising rules. This, they claim, allows Big Tech and other platforms to “capture billions of dollars in political advertising in each election cycle,” while evading “rules intended to ensure transparency and accountability” and “protect the safety and integrity” of U.S. elections.

Finally, the Four Affiliates Associations discussed how vMVPDs not being subject to retransmission consent rules are negatively impacting their revenue derived from subscription fees. They explained that often “a Big Four network (or, more accurately, its parent entity) will fully negotiate an agreement with a given vMVPD for carriage of network-owned stations as well as network-owned cable channels and other less popular programming—without any meaningful input from its non-owned Affiliate stations,” and then present the finalized agreement to its local Affiliated stations as “a ‘take it or leave it deal that the Affiliate must accept if it is to be carried on the virtual MVPD at issue.”

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[1] Letter from Mark J. Prak, counsel to Four Affiliates Associations, to Marlene H. Dortch, Secretary, Federal Communications Commission, MB Docket No. 14-261 (Apr. 21, 2022), https://www.fcc.gov/ecfs/search/search-filings/filing/10421083280887.