Roberts: Retrans Is a Lose or Lose Deal
By MIKE FARRELL -- Multichannel News, 4/9/2000 8:00:00 PM
New York-Comcast Corp. president Brian Roberts got his two cents in about retransmission consent and must-carry last week, saying they represent a "lose, lose-more" situation for MSOs.
As part of a panel discussion at the Variety/Schroders Big Picture Media Conference here, Roberts said retransmission consent leaves cable operators in a tough situation. Operators risk upsetting customers if broadcast channels are removed from their lineups, but can't necessarily afford to absorb any terms that the broadcasters demand, he added.
Roberts didn't refer directly to recent difficult cable-operator negotiations involving The Walt Disney Co. and Hearst-Argyle Television Inc., both of which own ABC Inc. stations and cable interests.
However, he noted: "The average [cable] rate increase is 5 percent and the average programming cost is going up 15 percent. This signals a choice from the operator-either raise rates and get in trouble with Washington, or push back. Like any negotiation, it occasionally gets tense."
Roberts also took a contrary view regarding the notion that once broadband services and networks become more prevalent, bargaining power will shift from distribution companies to programming owners.
"I would argue the opposite-that the Internet will make content so ubiquitous that traditional content will go down in value," he said. He added that there have long been predictions that broadcast-station values would decline, but they have not.
Roberts said cable has responded well to competition and will continue to do so.
"Every quarter and every year, we have grown our business," he added. "Competition has been a great wake-up call. You don't hear the same service problems you used to hear. We changed our business model completely to get ready for competition."
America Online Inc. chairman Steve Case had another form of competition on his mind in his keynote speech at the conference-the competition that will arise with the convergence of television and Internet services.
Case said convergence was one of the main drivers of AOL's decision to acquire Time Warner Inc., adding that the purchase will position the new AOL Time Warner Inc. for the next stage in the development of the Internet.
"We're distributing content on a variety of platforms," Case said. "There's a new world coming today, and we're creating a new networked world. It's nothing less than the start of a second Internet revolution."
Case said he expected more mergers between new- and old-media companies in the future. He said that is a logical step in the convergence of the four "boxes" most consumers rely on at their homes: the television, the PC, the telephone and the stereo.
"Already, the distinctions between these devices is beginning to blur," Case said, adding that in the future, TVs will become portals that will allow viewers to bookmark shows, answer their telephones and download music, to name a few.
"The first steps of convergence are already driving consumer expectations-the more they get, the more they want," Case said. "This is our chance as an industry to get people the simplicity and convenience they desire."
Case said the merger is progressing smoothly, and should be completed in the fall.
He added that he was "encouraged" by AT & T Corp.'s decision earlier this month to increase its voting control of Excite@Home Corp. and by its promise to make network capacity available to other Internet-service providers once exclusivity agreements expire.
He was also optimistic about similar pledges by other cable companies to open their networks.
"I am confident as we get into the balance of this year, the promise of open access will be a reality in the marketplace," Case said.
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