News

Let Little, Big Guys Join Forces

3/26/2012 12:01 AM Eastern

The following is excerpted from a letter from Mediacom
Communications chairman Rocco Commisso
sent March 22 to Federal Communications
Commission chairman Julius Genachowski:

For years, I have spoken out
against the unfair and discriminatory treatment
of smaller cable operators and their customers
by station group owners in retransmission-
consent (RTC) negotiations.

Mediacom, like many other American Cable
Association members, has experienced firsthand
the broadcasters’ practice during renewal
negotiations of giving extensions to large MSOs
while refusing similar extensions to smaller companies.
Access to local broadcast-television stations should
not vary solely because of the size of the consumer’s chosen
pay television provider.

Smaller systems also are routinely subjected to price discrimination
by station groups, even though there is no cost differential
or other economic reason that justifi es charging them
higher RTC fees than larger MVPDs. To add insult to injury, the
higher prices demanded by broadcasters often are presented
to smaller operators as take-it or shut-it-off propositions.

Even when the broadcast groups and networks are willing
to negotiate, they often do not engage directly with the
cable operator. Rather, they rely on outside counsel and consultants
who have expertise in negotiating RTC
agreements and, more importantly, frequently
have “inside” information about deals that they
worked on for other stations.

Under the circumstances, it is hardly surprising
that the cost of RTC is escalating at a pace that
far outstrips inflation.

Fortunately, the commission has tools at its
disposal to address the harm that RTC is causing
consumers. Congress made it clear the commission
has a duty to ensure that RTC does not result
in unreasonable increases in the cost of cable
service. Second, the Commission has broad authority
to ensure that the exercise of RTC reflects
“competitive marketplace” considerations.

For example, the commission could impose limits on
network involvement in the RTC process. A more direct approach
is to authorize smaller cable operators to designate
larger operators to negotiate on their behalf. I strongly urge
you to adopt such a rule. I also urge you to include a specifi c
provision making it a violation of the good-faith negotiation
standard for a broadcaster that is negotiating RTC for
multiple stations to refuse to negotiate with the designated
representative of a smaller operator. These changes will go
a long way to addressing the disproportionate bargaining
power that broadcast groups have in RTC negotiations with
smaller cable operators.

November