ACA Sides with … Ergen?
By Linda Moss -- Multichannel News, 1/25/2006 12:05:00 PM
Hell must have just frozen over: A cable lobbying group is applauding a direct-broadcast satellite provider.
The American Cable Association -- which represents small independent cable operators -- issued a press release saying that it “welcomed” the support of EchoStar Communications Corp. in its fight against retransmission consent.
In the statement, ACA president Matt Polka cited EchoStar CEO Charles Ergen’s testimony before a Senate committee hearing on indecency last week.
Ergen complained about retransmission consent, which the ACA and EchoStar both claim has allowed media giants to use carriage of their TV stations as leverage to gain distribution for cable networks.
“More than a decade ago, Congress granted local broadcast stations the right to demand payment from cable providers -- and then, ultimately, satellite -- in exchange for carriage,” Ergen told the committee. “While these broadcast conglomerates may offer their local broadcast channels on a stand-alone basis, they do so only at an astronomical price that has no basis in the market.”
That argument was music to the ACA’s ears and cause.
“ACA supports these statements by Mr. Ergen, and we welcome EchoStar and other businesses, associations and consumer groups that are joining together to encourage Congress to address the harms created by retransmission consent,” Polka said.
“ACA’s goal, like EchoStar’s, is to address the unintended detrimental consequences of the 1992 Cable Act, specifically current retransmission-consent and broadcast-carriage rules, as well as the effects of massive media consolidation,” Polka added.
EchoStar recently completed a retransmission-consent deal with Hearst-Argyle Television Inc., paying cash to continue carrying those TV stations. Bear, Stearns & Co. last week estimated that EchoStar is paying a 45-cent-per-month, per-subscriber license fee for each of those stations, amounting to $11 million total.
Hearst-Argyle typically bundles its retransmission-consent deals to also get carriage renewals for sister company Lifetime Television. But with EchoStar, the broadcaster just took the cash and didn’t do a deal that included Lifetime.
Without the leverage of Hearst-Argyle’s retransmission consent, Lifetime’s efforts to get a rate increase from EchoStar failed, and the network was dropped by the satellite provider.
