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Consumers Union Finds Considerable Consumer Harms in Sinclair-Tribune Transaction

Friday, November 3, 2017

WASHINGTON, D.C. — Consumers Union, the policy and mobilization division of Consumer Reports, today filed comments with the Federal Communications Commission (FCC) outlining its concerns with Sinclair Broadcast Group’s proposed merger with Tribune Media. The group noted that the merger would allow for excessive consolidation in the market, with the new Sinclair reaching nearly three-quarters of the country, and warned that the deal could leave consumers paying higher prices as a result of the new Sinclair’s market control and ability to skew the retransmission consent process in its favor.

“The proposed merger between Sinclair and Tribune presents an unprecedented level of consolidation in the broadcast market, with the combined companies reaching 72 percent of households in America. That alone presents a serious consumer concern. But this deal is even more troubling, considering the timing of the announcement and Sinclair’s reputation for being difficult when it comes to retransmission consent negotiations,” said Jonathan Schwantes, senior policy counsel for Consumers Union. “The FCC resurrected the UHF discount rule that allows companies to own more TV stations just weeks before this deal was announced.  Even with that rule – seen by many as technologically obsolete – this merger violates the FCC’s national ownership cap, threatening the benefits of a diverse media. Furthermore, a larger Sinclair could be expected to gain even more leverage in retransmission consent negotiations. Consumers will be the real losers in those deals, as they face higher prices through what we fear will be even higher add-on fees from their pay-TV providers.”

Consumers Union also noted its concern with what some believe may be a recent narrowing of the FCC’s view of the public interest test, through a “clarification” that may have tilted the balance in favor of merging parties instead of the broader public interest that includes consumers’ interests.

Schwantes said, “This new, narrower consideration of the public interest could have serious, long-lasting consequences for consumers — leading to a departure from the broader interpretation of the public interest as used to consider consumer, marketplace, and public harm and benefits in past reviews which ensured that consumers were appropriately protected. To merely judge this transaction on the basis of the ownership cap would ignore the other potential harms this deal poses to competition and consumers.”

The full comments are available here or at ConsumersUnion.org.