ACA Lawyer: Brace Yourselves for Retrans2/01/2005 10:01 AM Eastern
San Antonio -- A lawyer for the American Cable Association Tuesday warned small cable operators to start preparing for retransmission-consent negotiations now and offered them a primer on how to get ready for the testy talks with broadcasters that will begin in nine months.
Chris Cinnamon, outside counsel for the lobbying ACA, told National Cable Television Cooperative members that by planning ahead -- such as determining what position their companies will take on cash compensation or on dropping a TV station -- they can “avoid the traps and anticipate the crises” in the upcoming round of retransmission talks. Those negotiations will kick off in October.
Cinnamon told small operators to be prepared for the argument -- “and not a bad one” -- from TV stations that they are being paid for carriage by the direct-broadcast satellite providers and that they expect the same cash from cable operators.
“If EchoStar [Communications Corp.] is paying, why not [MSOs?]” is the kind of logic cable operators can expect to hear, Cinnamon said during the second day of the NCTC’s Winter Educational Conference here.
Cinnamon added that he is drafting a “template” for a retransmission-consent proposal that NCTC members can use and send to local broadcasters. “The co-op will make that available,” he said.
In his cable-operator “how-to” for planning retransmission-consent strategy, Cinnamon advised small operators to study their market and adjacent markets with an eye toward possibly importing out-of-market signals rather than paying cash for in-market stations.
He also suggested that operators formulate company positions on cash for carriage; offering other considerations to stations; digital-TV carriage; digital multicasting; and dropping signals as “a last resort.”
Cinnamon also told the NCTC’s members to know all of the rules regarding retransmission consent, or to hire a law firm like his that does. Operators should also determine ahead of time if they’d be willing to file a Federal Communications Commission complaint if “they feel that it is appropriate to right a wrong.”
And he offered five tips on retransmission-consent negotiations to operators: Submit a proposal to TV stations; keep it formal and written; monitor other negotiations; watch for problematic provisions in retrans deals proffered by broadcasters; and seek help from the NCTC and ACA when need be.
Dangerous provisions in retransmission-consent agreements include clauses that allow stations to terminate the deals in 60 days; most-favored-nation clauses; requirements that disputes be resolved in a court of the broadcaster’s choosing; and restrictions on program guides, like barring ads on them, according to Cinnamon.
During his presentation, Cinnamon read from the complaint Cox Communications Inc. filed with the FCC against Nexstar Broadcasting Group Inc.
Cox, refusing to pay 30-cent license fees for several Nexstar owned or operated stations, has been forced to drop them.
“You will begin to get an idea of what you will have to deal with,” Cinnamon said.
The lawyer also told cable operators to make sure that broadcasters follow all of the federal rules in terms of their retransmission-consent elections. Those elections from a station to a cable operator must be sent via certified mail, postmarked on or before Oct. 1, must be consistent throughout a franchise area and must be placed in a public file.
“If the broadcaster doesn’t get this right, there’s a consequence,” Cinnamon said. “And the consequence is that they lose their retransmission-consent rights for that three-year period. They become a must-carry.”
On a bright note, Cinnamon cited the recent emergency complaint that Horry Telephone Cooperative Inc. filed with the FCC against a Fox affiliate in Myrtle Beach, S.C., which was refusing to let the operator carry its HDTV signal.
The FCC expedited the complaint, seeking a quick response from the station, but the matter was quickly settled and Horry withdrew its complaint.
“An important point to take away from that is that the commission will listen to a small cable operator that’s put in a serious bind by a broadcaster that is on the wrong side of the regulations,” Cinnamon said.
The NCTC’s two-day winter confab drew 365 attendees this year, a double-digit increase from last year, according to officials.