NAB, cable rhetoric heats up in FCC lobbying over retrans fees

Michelle Clancy ©RapidTVNews | 05-10-2011

As the TV industry enters the season of must-carry retransmission negotiations between cable nets and FOX, ABC, CBS and NBC, consumer advocates and pay-TV networks fret that impasses over carriage fees could once again lead to blackouts.
In particular, the worry is that major sporting events and the like on certain operator networks could again be blanked out.
But in an open letter to FCC, National Association of Broadcasters (NAB) President Gordon Smith urged the regulator to stay out of the negotiations, which he said "should remain private and market-based."
"Even indications of government intervention in these private, market-based negotiations can impede their progress and slow their completion," he said. "The mere prospect of government intervention introduces uncertainty and distorts incentives in ways that disrupt the bargaining process and only make it more difficult to reach fair and equitable agreements." C
able, satellite and IPTV providers however consider the fees less than equitable, and accuse Big Media like News Corp. (FOX) and Walt Disney Co. (ABC) of forcing them to pay outrageous rates for bundled packages that cover not just free-to-air broadcast but also cable networks, like FOX News. If they refuse, the programming will be shut off.
It's a well-worn dance that threatened the broadcast of the World Series last year in Cablevision's New York footprint, to name but one high-profile spat. Broadcasters say they are offsetting weak ad markets, but the operators insist that the broadcasters are merely looking to make easy money. Comcast for instance, which now owns NBCUniversal, said that it expects to make "hundreds and hundreds of millions of dollars" each year in retrans fees.
"Retransmission consent dollars is not a good thing for the cable side of Comcast, but it's going to be a very good thing for NBCU," NBCU chief Steve Burke said at a Bank of America investor conference.Other cablecos that are not owners of their own media companies are lobbying the FCC to get involved. DirecTV for instance is teaming up with Time Warner Cable in front of the commission to urge the FCC to rewrite retrans regulation.
"We explained that the retransmission consent fees demanded by broadcast stations continue to skyrocket and that the outdated regulatory regime, which prevents true marketplace negotiations, results in harm to consumers," TWC's vice president of regulatory affairs wrote the FCC, according to The Los Angeles Times.
NAB's Smith however noted that services disruptions are high-profile but rare, noting that broadcasters are committed to reaching "fair and timely" retrans agreements with cable and satellite operators that allow media companies like FOX to "support quality programming."The FCC has a pending rulemaking on the issue, but has said that its authority to govern the negotiations is limited.