Smoother operators

NBC and Time Warner settle retrans without contention
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While ABC/Disney raised Cain over Time Warner's alleged monopolistic control over the nation's broadband pipe, the cable conglomerate and NBC last week hammered out a retransmission agreement with nary a peep from that broadcaster.

The retrans pact between Time Warner and NBC involves nine of the network's owned-and-operated stations and runs through 2008. The deal includes retransmission of NBC's digital and high-definition signals, plus surcharges for the network's supplemental coverage of upcoming Olympic games.

MSNBC and CNBC will carry about 250 hours of Olympic programming to supplement NBC's 165 hours of coverage for each of the five games occurring through 2008. Time Warner agreed to pay 5 cents more per subscriber per month over the course of the deal to get the additional Olympic coverage, or less than $10 million overall, according to an individual close to the negotiations. The surcharge puts CNBC at 29 cents and MSNBC at 27 cents per subscriber per month, the source said.

Unlike the contentious demands from Disney that led Time Warner to temporarily drop ABC's signal in five major markets, NBC's Olympics package was a take-it-or-leave-it proposition. The supplemental coverage will be offered on a separate feed, so operators are not required to take it. Many are opting for it simply to avoid angry calls from viewers who want to watch gymnastics rather than switch to track-and-field events.

Disney apparently offered no such flexibility, hinging availability of its ABC broadcast signals on cable deals that Time Warner claims would have cost it more than $300 million, and added about $1 to monthly cable bills. The last thing most operators want to deal with is rate hikes, which raise hackles at the FCC and generally enrage customers.

Time Warner also had a previously settled analog retransmission agreement with NBC that was effective through 2006, but it elected to renegotiate the whole package to include the Olympic feed and digital signals, according to a Time Warner spokesman. Thus Time Warner's dealings with NBC started from a much more stable foundation than talks with Disney.

Time Warner's retrans deal with Disney-owned ABC ended months ago, forcing the two parties to negotiate under a string of 30-day extensions.

When their differences culminated in Time Warner dropping ABC on the opening day of May sweeps, both companies made a play for public sympathy in the consumer press. Neither came out unscathed, but Time Warner emerged bloodiest, generating unwanted scrutiny from the FCC in the midst of being acquired by America Online. Disney eagerly leaped at the chance to paint AOL-Time Warner as a nefarious monopoly that would fill its program guides and Web portals with Time Warner properties. "Screen bias," Disney called it in FCC filings.

Not surprisingly, NBC's cable President David Zaslav made no mention of "screen bias," and in fact called Time Warner a "terrific cable operator."

NBC's deal with Time Warner is similar to one completed with AT & T last June. AT & T's rates for CNBC and MSNBC came to 28 cents and 22 cents, respectively. At the time, AT & T cable's then-President Leo Hindery made a big to-do about cable operators and networks reaching amicable retransmission agreements without FCC intervention. Less than a year later, cable operators are calling on the FCC to reconsider the language of retransmission consent law. Once again, the message from the FCC is for operators and broadcasters to work it out themselves.