Broadcasters: We Need Full Spectrum to Get Full Retrans Value

FCC told broadcasters need all allocations for leverage in retrans negotiations

By John Eggerton -- Broadcasting & Cable, 11/18/2009 4:52:35 PM

Broadcasters have been telling the FCC that they will need every bit of their digital spectrum allocations to have sufficient leverage to get their money's worth out of retrans negotiations with multichannel video operators.

At least that was the impression broadband czar Blair Levin says he got from a meeting with executives from the National Association of Broadcasters and the Association For Maximum Service Television.

Levin has been talking with broadcasters about possible scenarios for reclaiming some of their spectrum, including ones that could affect their use of multicast channels, HD over-the-air signals and mobile DTV.

According to a copy of a letter from Levin to NAB Executive VP and General Counsel Jane Mago, he was referring to an Oct. 30 meeting in which various spectrum reclamation proposals were discussed.

"There was an important point that your group raised that I want to make sure I understand," he said, pointing out that the point was not made reference to by the group's ex parte disclosure of the meeting.

"I understood several individuals in your group to assert that all broadcasters require a 19.4 megabits per second bit stream in order to have sufficient leverage to secure financial payments in retransmission negotiations, and that it is only by virtue of the digital transmission and the ability to utilize the entire bit stream from broadcasting that broadcasters are now receiving significant payments from multichannel video providers for their retransmission rights."

Broadcasters are increasingly playing hardball and asking for cash for their signals as a way to grow a second revenue stream at a time when the ad-supported model is being pounded by the economy and fractured by the Internet.

Levin has asked the groups to amend their ex parte letter to include that assertion if he has gotten it right, or clear up any misconception if he has not. FCC rules require such disclosures to include the substance of such conversations, said an FCC spokesman.

In her ex parte disclosure on the Oct. 30 meeting, Mago did say that "a plan to limit the ability of broadcasters to provide over-the-air HDTV service would harm...relationships with other multichannel video providers." She also said that observation came in response to an FCC staff member's statement that "most over-the-air service is provided in standard definition format and could be offered in any given market by a single broadcast transmission using multicast technology."