WASHINGTON, DC -- KPHO-TV Vice President and General Manager Edward Munson testified today before the House Energy and Commerce Subcommittee on Communications and Technology at a hearing on "Innovation Versus Regulation in the Video Marketplace."
Below is a transcript of his testimony as prepared for delivery.
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Good afternoon, my name is Edward Munson and I am the Vice President and General Manager of KPHO-TV in Phoenix, Arizona. KPHO is owned by the Meredith Corporation. We have 13 stations across the country, in places like Portland, Oregon, Nashville, Tennessee, and Flint/Saginaw, Michigan. I am here today representing the National Association of Broadcasters.
The topic of this hearing "Innovation Versus Regulation in the Video Marketplace," touches on two concepts that are part and parcel to being a local TV broadcaster. TV stations exist in a highly regulated environment, more so than any other witness on this panel.
In fact, broadcasters must comply with regulations not applicable to any other distribution platform. For instance, TV stations must abide by decency rules and children's programming requirements. We must give federal candidates "reasonable access" to air campaign advertisements, and we must offer those spots at the lowest rate charged to any of our commercial advertisers. We must maintain main studios within certain geographic limits and with specific staffing obligations; submit numerous quarterly, annual and biennial reports to the FCC; and compile quarterly lists of station programming.
We proudly embrace many of these responsibilities, but some regulations place broadcasting at a competitive disadvantage to the other video providers on this panel. For example, decades-old ownership restrictions reflect a time when broadcasting was the only game in town. It makes no sense to hamstring broadcasters with outdated limitations when our direct competitors are not restricted in any way. Another example is the online public file regulation which requires local TV stations to place sensitive pricing information online when our direct competitors do not have the same obligations.
For these types of regulations, fundamental fairness requires regulatory parity for the benefit of competition and consumers.
Based on our fundamental obligation to serve the public interest, some in the pay-TV industry are arguing that a programming dispute means broadcasters are somehow not serving their local communities. In the rare event that a broadcaster has a dispute with one pay-TV company in a market, consumers have multiple other options to get their video programming. We understand that many of you are concerned about the impact these disputes have on your constituents and we share that concern. That is why it is important to remind this Committee that no broadcaster has ever stopped broadcasting because of a dispute with a pay-TV provider. We are never "off the air" or "blacked out." Our signals are always being broadcast and they are always free.
Over my career, I have personally been involved in many successful carriage negotiations with companies like CenturyLink, Suddenlink, and Mediacom. My experience, like the experience of nearly the entire broadcast television industry, is that deals get done all the time. But of course, you don't hear about the ones that go smoothly, you hear about the handful that don't. There is no doubt the Time Warner Cable/CBS dispute was very unfortunate, but it was predictable. The dispute seemed almost orchestrated out of a DC lobbying playbook – create a crisis, then ask Congress to fix the crisis in your favor.
The pay-TV industry will tell you that carriage impasses have dramatically increased, that the retrans system is "broken" and needs to be fixed. But honestly, that's a bit disingenuous.
In the few instances where agreements have not been reached in the last two years, there is a distinct and disturbing pattern: 89% of the disputes have involved only three pay-TV companies: Time Warner Cable, DISH and DirecTV. That's nearly 9 out of every 10 disputes. What that suggests to me is there is not a problem with the process, but that there's a problem with the players. And we should not be rewarding this bad behavior.
It is not a coincidence that these are the very same companies pressing Congress most aggressively for government intervention. These pay-TV companies have ratcheted up their efforts for government involvement in retransmission consent negotiations because, despite having very healthy margins and soaring stock prices, they are looking to Congress to help control their programming costs. But pricing decisions are best left to the marketplace.
Similarly, the government should have no role in deciding when, how or where an owner of video content distributes that content. These carriage agreements are increasingly about the digital rights for our popular programming. We want to make sure that consumers using new and innovative platforms can access our content which, in turn, fosters more competition in the video marketplace.
In conclusion, television broadcasters provide the most watched media out there – and by a wide margin. But we are not running to Congress asking for preferential treatment in our negotiations, or for any legislative changes to benefit our side. We want to negotiate freely in the market for the value of our content - we only ask that Congress not tip the scales in favor of any one industry.
Thank you and I'm happy to answer any questions.
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The National Association of Broadcasters is the premier advocacy association for America's broadcasters. NAB advances radio and television interests in legislative, regulatory and public affairs. Through advocacy, education and innovation, NAB enables broadcasters to best serve their communities, strengthen their businesses and seize new opportunities in the digital age. Learn more at www.nab.org.