Broadcasters Counter Cable With Retrans Letter

NAB argues that Congress and the FCC have reviewed the playing field and found it level
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Broadcasters have countered the cable and satellite operators' letter to House and Senate Commerce Committees with one of their own.

While Time Warner, Cablevision and others asked Congress to review what they called a broken retransmission consent system, National Association of Broadcasters Chairman Paul Karpowicz said in a letter that Congress and the FCC have already reviewed the process and concluded that the playing field was level, that government should not dictate outcomes in free market negotiations, and that if there are problems, the FCC has the authority to address them via complaint of not bargaining in good faith.

Karpowicz points out that no broadcaster has ever been found guilty of bad-faith bargaining.

"The retransmission consent rules do not guarantee any compensation," he wrote. "Rather, the rules only provide an opportunity for the broadcaster to negotiate for
compensation for the use of its signal."

Cable operators argue that broadcasters have been given a free incubator in cable via must-carry and the government mandate that broadcasters be carried on the basic tier.

Karpowic counters that must-carry retrans is instead a way to correct earlier inequities. "Prior to the law, cable companies were permitted to take broadcasters' signals and use those signals to attract paying subscribers, without broadcasters' consent," he said. "Recognizing the value of broadcaster programming and to correct this inequity, Congress gave broadcasters the right to negotiate for the use of their signals."

There are legislators on both sides of the argument. Amidst the Oscar-centric, high-profile showdown between WABC and Cablevision last week in New York, Senator John Kerry (D-Mass.), for example, suggested independent arbitration and preventing broadcasters from pulling their signals during retrans disputes, or just what Time Warner and Cablevision are asking for. Rep. Joe Barton, one of the legislators to whom the Karpowicz letter was addressed, said instead that marketplace negotiations are best left to the marketplace.

A Coalition of multichannel video distributors large (Time Warner, DISH, DirecTV, Cablevision) and small (the American Cable Association's 900 or so members) have asked the FCC to step in as well in a petition for rulemaking.

Look for the FCC to take up the issue, and the Democratic Congress to apply some pressure. But with a broadband plan to deal with, and given the FCC's current penchant for workshops and beaucoup public input, don't look for action anytime soon, says one veteran cable attorney.