Policy

Rx for Retransmission

2/09/2007 7:00 PM Eastern

When it comes to governing the relationship between cable operators and broadcast-TV stations, “the industry has some major issues to face,” says Mediacom Communications CEO Rocco Commisso.

And he should know: His company earlier this month came to terms with Sinclair Broadcast Group to carry the signals of its 23 TV stations in 12 states. The pact put Sinclair stations back on Mediacom systems after almost a month of darkness, just in time for Super Bowl XLI on Feb. 4.

The Mediacom-Sinclair case may wind up buttressing broadcasters’ contentions that they should be paid for the signals of their local TV stations. Mediacom must now pay cash for carriage of the Sinclair stations. Those payments will likely get passed on to Mediacom’s customers at some point.

But Commisso said his company has completed most of its major broadcast-TV deals and the majority of Mediacom’s contract renewals won’t come up for another couple of years.

Nonetheless, Mediacom is one of the nation’s 10 largest operators, with about 1.4 million subscribers. About 700,000 of those subscribers were affected by the blackout of Sinclair stations. In an interview with Multichannel News last week, Commisso said Congress should look again at the rules governing how cable operators and broadcasters deal with each other, to ensure that the viewing public doesn’t lose out when retransmission-consent negotiations break down. At the very least, broadcasters should never be permitted to unilaterally shut off the signals and hold consumers hostage to their demands.

His set of prescriptions:

  1. : Discrimination should not be acceptable. Broadcasters, like cable networks, should have published rate cards reflecting the station’s in-market ratings.

  2. : Local monopolies on broadcast-network signals should be eliminated. Cable operators should be allowed to import signals, especially when there is an impasse.

  3. : Anti-competitive marketing campaigns should be outlawed. A broadcaster should not be allowed to run marketing campaigns and subsidize a customer’s switch to another provider during negotiations.

  4. : Eliminate the requirement that broadcast-TV stations be part of the basic programming tier. If broadcasters’ signals can be placed on a separate tier of service, as is permitted on satellite platforms, they should be separable on cable as well.

  5. : Major broadcast networks should treat cable companies like broadband users. Cable systems should be able to make agreements directly with broadcast networks to take their full lineups or individual shows.

  6. : Allow operators to share in the advertising revenues. Cable operators should be entitled to two minutes of advertising on broadcast stations per hour.

  7. : The good faith standards for retransmission consent negotiations should be revisited. The FCC should outlaw any form of discriminatory pricing, abusive tactics and anti-competitive behavior by broadcasters.

  8. : Stop further relaxation of rules governing media consolidation. Particularly, no broadcaster should be allowed to own or operate more than one TV station in a market and use retransmission consent to hold cable companies and their customers hostage.

  1. Imagine what would happen if one broadcaster owned two or three stations in a market, had the right to charge whatever it wanted for each of those stations and could force carriage to 100% of the subscribers in each market, Commisso said, adding, “They’d put you in bankruptcy.”

September