Genachowski: Open to Helping Smaller Cable Ops With Retrans Issues

Applauds relative lack of retrans blackouts in the most recent cycle, though ACA execs saw it somewhat differently
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FCC Chairman Julius Genachowski told an American
Cable Association audience in Washington Wednesday that the
commission was "open" to finding a way to insure that smaller cable
operators aren't disproportionately affected by retransmission consent negotiations
with larger station groups and networks.

"That is something that the ACA and the commissioner and ACA should
continue to talk about," he told ACA President Matt Polka in a morning
Q&A.

That
would be just fine with ACA, though there could be more talk -- say, advice to
Congress -- than action out of the commission, at least via its open retrans
rulemaking, given that the chairman continues to say the FCC has little
authority over the workings of that system, a system cable ops say is arcane,
outmoded and skewed toward bigger broadcast players.

Genachowski
applauded the relative lack of retrans blackouts in the most recent cycle,
something ACA execs saw somewhat differently.

The
chairman was addressing the ACA's annual summit, a chance for representatives
of smaller and mid-sized cable operators to take to the Hill to push for
retrans reform, among other things (coincidentally, the same week that
broadcasters are visiting their legislators and regulators to argue for leaving
retrans alone).

Asked
for his take on the latest round or retrans negotiations, Genachowski said:
"We were pleased that the number of blackouts and serious instances of
consumer disruption were minimal," he said. He also said he recognized it
took "real work" on the part of cable operators and broadcasters.

In
a briefing with reporters following the speech, ACA officials suggested that,
at least in the case of their members, it was not so much a case of having
worked it out as it was of eventual capitulation to broadcasters who have undue
power in the negotiation.

Colleen
Abdoulah, ACA chair and CEO of WoW! Internet, said that blackouts were not the
only barometer. "Competitively, you have no choice. Pretty much all of us
are in competitive markets, and if your competitor has this product, you've got
to have it. So you buck up, swallow enormous increases, pass what you can on to
customers and take the hit on your margins, which affects your ability to
provide advance services." Genachowski had earlier urged ACA members to
consider building out to unserved areas -- with government help -- as both a
business proposition and a community service.

"When
the chairman says we had a good retrans round," said Steve Friedman, past
ACA chairman and COO of Wave Broadband,
"the reason we didn't drop anything is we had no choice. In my company, we
don't do things to our customer."

Genachowski
took a bit off that rosy retrans outlook, conceding the FCC does not have a
"clear picture" of what was happening in those retrans deals, but was
getting in put. That includes from ACA, which has been pushing the commission
to ask for some of the contract terms cable ops are prevented from making
public due to broadcaster-imposed nondisclosure agreements.

While
Genachowski said the FCC had heard the concerns from ACA members and consumers,
which was why the FCC launched its retrans proceeding a year ago, he did not
suggest any action in that docket was forthcoming. He called it an opportunity
"to look at what the FCC's options are, the ways the marketplace has
changed over the years, and whether there are recommendations we can make to
Congress."

In
terms of those FCC options, he reiterated that the FCC's authority is
"very limited" to "revise the way the system works," or in
ACA's view, works to the benefit of broadcasters rather than consumers or cable
operators.

ACA
officials conceded Wednesday they did not expect help from the Hill in terms of
proposed legislation to sweep away retrans
,
a bill that applauds but almost certainly won't pass. But they said it was
useful in keeping the conversation going, and saw some hope for FCC action in
Genachowski's recognition of the impact of retrans and other regs on smaller
operators.

While
the retrans docket is not likely to heat up anytime soon, the FCC could address
issues like joint retrans bargaining through its ownership rule or localism
reviews, or its review of program access rules.

Asked
about the FCC review of its dual analog/digital and HD carriage mandates
currently under review per a June 12 deadline, the chairman would only say that
if the record showed smaller operators should continue to get a waiver from the
HD mandate, that's what the FCC would do. No news flash there, but he used the
issue to make the point that the record matters. "Data-driven" has
been a mantra of the Genachowski commission nearly to the point of parody. He
said ACA should continue to make its case. "It is worth your time and
effort to make sure we have the record that we need. If we have the record,
we'll do the right thing."

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