NAB: Retransmission Consent Regime is Working

Association says programming costs can't be blamed for rising cable rates
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The National Association of Broadcasters says the retransmission consent regime is working the way it was meant to when Congress established it, and tried to make that point with one of the FCC's five commissioners and Media Bureau staffers this week.

In a meeting with FCC Republican Commissioner Meredith Attwell Baker, NAB representatives said programming costs are rising more slowly than other costs and can't be blamed for rising cable rates. "Retransmissions fees make up a small fraction of programming costs, and an even smaller percentage of MVPD revenues," said NAB.

The NAB is not preaching to the choir on that point, at least from where the top FCC commissioner is sitting. FCC Chairman Julius Genachowski tied cable rates to retrans rates in his speech to NAB last month. "I'm concerned about the potential for rising cable rates," he told broadcasters. "Some ask: is 'free TV' really free when cable rates go up because of retransmission fees?"

NAB's answer is that retrans fees are not driving up rates.

NAB's study points to a November 2009 cable industry finding that TV stations cost between 37 cents and 74 cents per sub, saying that is hardly excessive and that it is only between .75% and 1.5% of the average cost for expanded basic.

In his NAB speech, Genachowski also expressed concern about the effects on consumers of signals being pulled by broadcasters during retrans impasses (as is their contractural right). NAB told the FCC staffers and Attwell Baker that such impasses are "extremely rare."

The FCC is currently conducting an inquiry into the retransmission consent regime, spurred in part by high-profile impasses that affected, if briefly, an Oscar telecast in New York, and threatened the nigh-onto-sacrosanct access to over-the-air college football Bowl games on New Year's Day and beyond.

The chairman has put that inquiry into a consumer context, invoking the rate and impasse issue, while also saying he recognizes they are marketplace negotiations between private parties.

Possible FCC responses could be outside mediation or standstill agreements that prevent signals from being pulled while some resolution is being sought. Some cable operators have sought changes to what they argue is a system that favors broadcasters and does not recognize increased competitition in the marketplace.

Broadcasters argue that the fact that they have more places to take their wares--satellite, telco--is still a limited amount of competition and does not change the fact that they need to be on all those platforms.

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