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GUEST EDITORIAL: Joining Forces to Battle Retrans

Discussion in 'Legislative and Regulatory Issues' started by Nick, Feb 8, 2006.

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  1. Nick

    Nick Retired, part-time PITA DBSTalk Club

    Apr 23, 2002
    "ACA estimates that retrans
    adds $500 to $800 million
    to the cost of basic cable"

    By Matthew M. Polka - President, ACA

    In Washington, D.C., everyone has an issue where their
    proverbial ox is getting gored. Video and telecommunications
    are no exceptions. You show me an issue, and I'll show you
    ten different groups that have a unique take on each one.

    That's why it's so difficult for lawmakers and regulators to
    act because they have to pick among complicated views and
    usually among groups and concerns they respect. But have you
    looked in the news lately on retransmission consent issues?
    Something downright unprecedented is happening.

    The American Cable Association (ACA), EchoStar, National
    Telecommunications Cooperative Association (NTCA), RCN
    Corporation, Organization for the Promotion and Advancement
    of Small Telecommunications Companies (OPASTCO), Broadband
    Service Providers Association (BSPA), and others are all on
    the same side!

    Each one of these diverse and competitive groups wants
    retransmission consent reform. They want Congress and the FCC
    to change the current retransmission consent and exclusivity
    rules to break up the power of the media and programming
    conglomerates that use today's broadcast carriage rules to
    force content and cost onto consumers, whether they like
    it or not.

    Family and consumer groups are there too. Consumers Union,
    Consumer Federation of America, Parents Television Council,
    Concerned Women for America, and other media access groups
    are also fighting the scourge of media consolidation and the
    impact on consumers. And others are joining the fight.

    What are all of these groups fighting together against?

    "The chorus against the retransmission
    consent rules and the media conglomerates
    and broadcast groups is growing."

    The media conglomerates' and broadcast groups' escalating
    retransmission consent demands are resulting in higher
    costs, less choice, and carriage of unwanted channels that
    many consumers find indecent.

    Why are all of these groups working uniquely together to
    fight this common cause?

    Because they and their members don't own programming. They
    on't have a financial interest in it. They can speak freely
    to represent their customers and to tell Washington the
    harm that federal broadcast carriage rules have caused when
    put in the hands of the media conglomerates.

    On the other side? Those that have an enormous financial
    interest to protect.

    Disney-ABC, Viacom-CBS, Fox-News Corp., General Electric-NBC,
    major broadcast groups like Sinclair, Hearst-Argyle, Nexstar,
    Gannett and others. Month after month these groups use their
    market power and leverage to extract hundreds of millions
    of dollars from consumers in the local market, all in the
    name of protecting "localism."

    This is cynical. How does forced carriage of unwanted channels
    and sharply rising costs to consumers preserve localism? It
    does not.

    Besides, if these conglomerates and broadcast groups really
    wanted to protect localism and not worry so much about
    feathering their financial coffers, then they could do one
    thing that would solve the problem - elect must-carry instead
    of retransmission consent. But they don't do that, because
    they don't get paid for must-carry.

    In the current round of retransmission consent, ACA estimates
    in our members' service areas alone that retransmission
    consent demands from the conglomerates and broadcast groups
    added between $500 and $800 million to the cost of basic
    cable. This amounts to a transfer of wealth from our rural
    customers to corporate headquarters in Los Angeles, New York
    and elsewhere.

    The broadcast groups and conglomerates say that Congress and
    the FCC can't give cable and satellite operators more choice
    to create packages of tiers that would better suit their
    customers' needs and wants. That would destroy programming
    diversity, they say. Yet the networks increasingly sell
    Desperate Housewives, CSI and other sports and entertainment
    programs on an a la carte basis on IPods.

    Last week an independent study issued by Arlen Communications
    confirmed that broadcasters are exploiting the current
    retransmission consent regime. The study describes how
    broadcasters' use of exclusivity and escalating demands are
    hurting consumers, and, in some areas, impeding the rollout
    of broadband.

    ...broadcasters should be paying...for
    carriage, not the other way around

    Another key point from the Arlen study - broadcasters gain
    more than $4 per subscriber per month in advertising revenues
    from the subscribers delivered by cable. This suggests that
    broadcasters should be paying cable for carriage, not the
    other way around.

    To remedy these problems, Congress and the FCC must reform
    the retransmission consent laws in three ways:

    First, when broadcasters seek a price for retransmission
    consent, give video operators a "right to shop." Washington
    must break down the barriers of exclusivity so that the
    marketplace can moderate retransmission consent demands.

    Second, end forced tying and bundling through retransmission
    consent. The law should prevent media conglomerates from
    holding local broadcast signals hostage for carriage of
    affiliated channels.

    Third, apply the FCC's News Corp./DirecTV conditions to
    all retransmission consent negotiations. Under the FCC
    conditions imposed on the DirecTV deal, Fox cannot pull
    its signal during the course of negotiations or arbitration.
    This single condition has made those negotiations more
    orderly and reasonable.

    The chorus against the retransmission consent rules and
    the media conglomerates and broadcast groups is growing.
    And it's getting louder.

    Matthew M. Polka is President and CEO of the American Cable
    Association, which represents the interests of small and
    independent cable operators. ACA is based in Pittsburgh.

    www.SkyReport.com - used with permission
  2. kenglish

    kenglish Icon

    Oct 2, 2004
    Salt Lake...
    Doesn't wholesaler-to-retailer markup add a lot to the cost of groceries, appliances, cars, fuel, and every other product?

    If they are telling the truth when they say they "need" the local stations' signals in order to stay in business, then why do they expect to get them for nothing? Detroit and Tokyo don't give cars away to the dealers, and farmers (never mind....let's say food processing companies...) don't give away food to the stores. Why should the station's buy programming, then have to give it away to the re-sellers?
  3. FTA Michael

    FTA Michael Hall Of Fame

    Jul 21, 2002
    Because any local guy with a decent antenna can get that signal for free. Because the local stations have been licensed by the public to serve us in exchange for exclusive use of their signal frequencies.

    I don't know that how fair it is to resell something that you get for free without giving the originators a piece of your profit. But I believe the resellers have a point, especially if adding lots of extra shopping subchannels (for example) forces infrastructure improvements or bumps paying channels off the system.

    That's why we have representatives to wisely judge and balance the arguments to see what's fair to all parties, including the viewing public. ;)
  4. agreer

    agreer Godfather

    Apr 7, 2006
    Great point, but I have to say, D*s recent move to the mpeg-4 platform is a good thing brought on by all of this, the dishes with 4+ LNBs are getting a little rediculus, at some point you may as well just get a c-band dish and put a D* LNB inside the feedhorn. Give me the 18-20 inch dish with no more than 2 LNBs (preferably in the same housing ala Dish 500), these ~25-30 inch dishes seem a little obserd.
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