Cable, satellite companies and consumer groups request retransmission consent reform

Cable, Satellite Ops Seek Congressional Review Of Retrans [Multichannel News]

Cable and satellite companies, including Insight, representing 65 million customers are calling on the federal government to fix the broken system that allows broadcasters to black out their channels during contract negotiations with cable and satellite providers.  Consumer groups Public Knowledge and New America Foundation also joined Insight, DirecTV Group Inc., Dish Network Corp., Verizon Communications Inc., Bright House Networks L.L.C., Charter Communications Inc., Cablevision, Time Warner Cable, Suddenlink, Bright House Networks, Mediacom, and hundreds of smaller cable and telephone companies in a letter to the U.S. House and Senate Commerce Committees.

Unfortunately, it's become an all-to-common occurrence that broadcasters are becoming more and more willing to pull their signals off the air, if they can't reach an agreement. Just this week, a dispute between Cablevision and the local ABC outlet in New York resulted in an 18 hour blackout of ABC7 for all Cablevision customers.  The signal was restored 15 minutes after the beginning of the Acadamy Awards, suggesting that high-value programming can and will be used to increase their leverage to get better long-term deals. 

Consumer groups Public Knowledge and New America Foundation have joined the coalition in the letter because they also recognize that the current retransmission rules are being exploited by broadcasters to the detriment of viewers who just want the programming they're paying for.

Here's the letter that the coalition sent to Congress:

Dear Chairmen and Ranking Members:

The undersigned serve, or represent companies that serve, over 65 million video consumers. We write to you today to bring to your attention to, and to seek your assistance in addressing, the harm that is being caused to those consumers as a result of increasingly contentious negotiations over the terms that broadcasters are demanding from multichannel video programming distributors for retransmission consent. The most recent retransmission consent dispute, between ABC and Cablevision, resulted in over three million consumers losing access temporarily to ABC programming. That dispute is just the latest example of how the retransmission consent regime is broken and in need of repair, and comes immediately in the wake of similar highly publicized disputes that occurred at the turn of the year. During the impasse between ABC and Cablevision, over 70 state legislators and a number of Members of Congress raised concerns about the impact retransmission consent-related service disruptions and threats of such disruptions are having on consumers.

Congress gave broadcasters retransmission consent rights in 1992 as part of a regulatory scheme that was intended to ensure the broadest availability of broadcast programming to the public. The video marketplace is dramatically different today on the distribution side with MVPDs competing with one another in nearly every community nationwide. These changes in the market are allowing broadcasters to wield the very government protections meant to preserve access to the public in order to threaten to deny - or actually deny - their signals to consumers as a tactic to increase their profits.

Not surprisingly, the broadcasters would prefer that Congress and the Federal Communications Commission stay on the sidelines and leave consumers helpless in the face of such brinkmanship tactics. But that argument - and the related argument that negotiations for the carriage of broadcast stations should be treated no differently than negotiations for non-broadcast programming services like the NFL Network or the Discovery Channel - ignores the unique government benefits and privileges conferred on broadcasters that preclude the normal give and take of private contractual negotiations.

As a result of these government benefits, broadcasters alone enjoy channel location and tier placement guarantees that maximize their access to viewers, and broadcasters alone are guaranteed undue leverage in carriage negotiations by virtue of a detailed set of program exclusivity and blackout rules. Additionally, broadcasters alone have been the beneficiaries of mandatory carriage rights - must carry - that have allowed them over decades to grow their audiences through the free use of facilities built by video providers while at the same time having been granted the freedom to dictate the terms on which they will allow the retransmission of the same programming that is available over the air and increasingly over the Internet for free.

Congress was aware of the fact that retransmission consent could, if abused, lead to higher prices for consumers or service interruptions. But Congress believed that these risks could and would be managed by the Federal Communications Commission. Unfortunately, as recent events confirm, the balance of power that existed in 1992 has shifted and it is consumers who are caught in the crosshairs. It is time to consider how to restore balance to the unique retransmission consent process and take steps to protect consumers against either seeing access to broadcast signals priced out of their reach or having that access denied to them.

We respectfully urge you and other Members of Congress to carefully examine the circumstances that have resulted in the current imbalance in retransmission consent negotiations. We stand ready to assist you in whatever way possible in taking the necessary steps to ensure that, in the future, retransmission consent benefits those Congress intended for it to serve: the American people."

Another group of distributors, including most of the same companies that signed the letter, have also asked  the FCC to consider retransmission consent rule changes in order to settle disputes between multichannel video distributors and broadcasters.  The filing does not opine on the fairness of Retransmission Consent to cable and satellite customers -- that battle was fought long ago.  Instead, it seeks to find another way to resolve more and more common impasses, rather than TV stations simply pulling their signals out of the homes of millions of their viewers.  The companies have offered one solution, as an example of how these disputes could be better handled -- binding arbitration -- which is not the only answer but certainly one that is worth considering.

I plan to comment further on this subject in the coming weeks.

Comments

[ARGO]

We're not missing out on anything important.

[Gary Dayton]

As private businesses, broadcasters and retransmitters are perfectly within their respective rights to withhold services from each other after the terms of an ending contract have been completed and prior to the signing of a new one. If these tense negotiations continue to escalate, and broadcasters continue to invoke this drastic tactic, I think they will pay a price to the public. Namely, the public isn't likely to stand by idly as their favorite programs are replaced by color bars for very long. They'll cry foul, and advertisers will take note. When ad dollars move to broadcasting companies that are more keen to negotiate calmly with respect to viewers, that will likely dampen the haste to pull programming in the midst of negotiations in the future.

Internet programming is changing the business dynamic between retransmitters and broadcasters, so negotiations are bound to get testy over the next 5 years or so. Let's have both sides remain conscious of each others concerns, but also remain conscious of the viewing public (who ultimately pays the bills). There is no need for the government to step in here and regulate the protocol for negotiation disputes. Your companies, though on opposite sides of the table, will prosper together and in doing so will provide a great service to the public if you negotiate fairly and don't drag the government in when you don't get your way. It pisses me off when the government plays favorites anyway.

Insight customer,
Gary