A group of telcos including CenturyLink (NYSE: CTL), Consolidated and TDS have asked the FCC to bring consistency to the retransmission consent negotiation process.
In a filing with the FCC, these service providers, who were joined by the Independent Telephone & Telecommunications Alliance (ITTA), said that the FCC needs to address "head-on the lack of transparency in retransmission consent negotiations."
For emerging IPTV players, retransmission costs continue to be a big issue, particularly as they look to enter new markets to deliver service. According to estimates made by FCC Chairman Tom Wheeler, retransmission consent fees rose by nearly "8,600 percent between 2005 and 2012."
The group said that "These runaway increases are attributable in large part to the fact that the good faith negotiating requirement, as currently implemented, imposes no obligation on a broadcaster to explain, justify, or substantiate that its price demands reflect competitive marketplace considerations."
The FCC should require that any party negotiating the terms of a retransmission consent agreement provide relevant information that can back up their bargaining claims, the group said.
"At minimum, a broadcaster that seeks to justify its price demands by reference to "market prices" or the prices paid by other MVPDs should be required to provide documentation substantiating those assertions," the group said.
As insurgent video providers, these telcos are at somewhat of a disadvantage in negotiating rates for video content over established cable MSOs like Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC), which have enjoyed a near-monopoly on video services in the markets where the offer service.
However, it's clear that these service providers through their deployments of IPTV are looking to break up cable's dominant spot in the ever-evolving video market.
Take CenturyLink, for example. Earlier this week, the telco officially launched its IPTV service in Seattle, a market where Comcast has been the dominant provider. In the second quarter of 2015, CenturyLink added about 8,400 Prism TV customers and launched service in three other markets -- including Portland, Ore., Salt Lake City and Minneapolis -- ending the quarter with a total of 2.6 million addressable homes.
TDS is being no less aggressive with its plans. The telco said it would bring FTTH and IPTV services to an additional seven wireline markets by the end of this year.
- see the FCC filing (.pdf)
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