Cable TV Broadcast Retransmission Consent Feuds "Ease Up" [Telecom]

| Multichannel News, June 20, 2009 | Retransmission Feuds Ease Up | Era of Feuding May Be Over, Analysts Say ? At Least for Big MSOs | by Mike Farrell | | Broadcasters and pay TV service providers may have informally | turned down the retransmission-consent volume over the past | several months, as the nation moved through some potentially | dicey regulatory periods ? the analog-to-digital transition | and the new presidential administration. | | And though it is likely that a few heated discussions will pop | up over the next few years, some analysts believe that, at | least for now, the old days of bitter, drawn-out fights | between cable operators and station groups may be over.

This article (including comments from me writing as texascableguy) continues at:

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Prior to 1975, virtually all programming carried by cable TV systems consisted of local or nearby television broadcast stations, with a few channels originated locally by the cable TV company itself ("local origination") or dedicated to PEG (public, educational, and government) access. FCC rules in force at the time specified:

- Which stations MUST BE carried.

- Which stations could be carried at the cable company's option.

- Which stations COULD NOT be carried.

Cable companies did not have to obtain a station's permission before carrying it. Most broadcast station licensees didn't even know how many cable systems were carrying their signals, or where they were.

In 1975, Time, Inc. began to transmit HBO nationwide via satellite. Shortly thereafter two more satellite-delivered cable-only channels were launched: Ted Turner's Atlanta UHF station WTCG (now TBS Superstation) and Pat Robertson's Christian Broadcasting Network (now ABC Family). Within a few years, numerous other channels were launched. Today, hundreds of satellite-delivered channels are available from dozens of suppliers.

Programmers charge cable systems for the right to carry their channels. License fees vary widely, ranging from zero (religious and home-shopping channels) to over $2.00 per subscriber per month (ESPN).

But the old FCC rules governing the retransmission of broadcast television stations remained largely unchanged until 1992.

In 1992, Congress enacted the Cable Television Consumer Protection and Competition Act of 1992. This act gave broadcast station licensees control over cable-system carriage of their signals. Under this Act, each licensee has the right to choose two options with respect to any give cable system:

- MUST CARRY: The cable system must carry the signal under technical rules specified by the FCC. However, the station cannot charge for the use of its signal.

- RETRANSMISSION CONSENT: The cable system is required to obtain the permission of the licensee. The licensee is free to demand compensation or impose other requirements.

Most large regional independent stations and major network affiliates usually elect retransmission consent. Less popular stations usually elect must carry.

For several years after 1992, stations electing retransmission consent did not demand financial compensation. However, many of them demanded that cable systems carry (and pay for) co-owned non-broadcast programming. Example: Disney required cable systems to carry most Disney-owned non-broadcast channels (Disney Channel, Lifetime, A&E, History, ESPN and its clones).

With the rise of satellite television (DirecTV and Dish) and telco-delivered television (FIOS, U-Verse), similar must-carry/retransmission-consent procedures were put in place.

In recent years, station licensees have been demanding financial compensation as a condition for granting retransmission consent. Example: as I noted here two years ago, Univision affiliates now charge $1.00/subscriber/month for the signal.

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This situation has led to some notable battles. In a few cases, when retransmission negotiations failed, cable/sat companies have simply stopped carrying certain broadcast stations.

Of course, whichever side wins these battles, the subscribers lose. If a cable/sat company drops a station's signal, the subscribers lose a channel. If the cable/sat company gives in and agrees to pay a larger fee, the cost is passed along to the subscribers.

Although this situation has hit all cable and sat providers, it has hit small cable operators particularly hard. The American Cable Association, representing small cable companies, has led an effort to get Congress to provide some relief from ever-increasing retransmission consent fees.

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The Mutlichannel News article linked above notes that "Broadcasters and pay TV service providers may have informally turned down the retransmission-consent volume over the past several months..." Perhaps so, but ACA, led by its president Matt Polka, will certainly continue to fight for lower rates.

Neal McLain aka texascableguy

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Neal McLain
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How do these rules apply to each multi-plexed programming stream of a digital broadcaster choosing [to invoke the] "must carry" [option]? Or does it apply only to the the first subchannel? If that subchannel is HD and the cable system offers HD channels, must it be carried as HD?

An independent broadcaster in Chicago owns a full power license and several low power licenses. It has mixed and matched programming over the years, typically introducing new program concepts on one of the low power stations before simulcasting it or moving it [to] a subchannel of the full power digital station.

Does simulcasting via one of their low power stations give them additional clout when negotiating carriage because the law gives them additional privileges for owning more licenses? They've complained for years that DTV and Dish won't carry all programming streams, even the ones simulcast on one of the low power stations.

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