Washington -- The four largest broadcast networks want to
eliminate possible government limits on their ability to ink retransmission-consent deals
with direct-broadcast satellite carriers.
Chiefs of the "Big Four" networks expressed their
views in a June 28 letter to the House-Senate committee that is attempting to craft a
single bill that would, among other things, permit DBS carriers to serve local markets
with local TV signals for the first time.
"We believe it is inappropriate for the government to
inject itself into the private negotiations between two parties, especially when no
compelling evidence exists that either party has [refused], or is likely to refuse, to
negotiate," the two-page letter said.
The letter was signed by Bob Iger, chairman of ABC Group;
Chase Carey, chairman and CEO of Fox Television; Mel Karmazin, president and CEO of CBS
Corp.; and Bob Wright, president and CEO of NBC.
Retransmission consent is one of the big issues facing
lawmakers as they attempt to rewrite the Satellite Home Viewer Act in an effort to bolster
competition to market-dominant cable operators.
Broadcasters -- especially the networks -- want to keep the
right to charge DBS providers per-subscriber fees for local retransmission. But a
requirement in the bill that cable and DBS retransmission-consent deals be substantially
similar could foil that plan because cable is not paying fees.
Bob Okun, NBC's Washington vice president, said it would
set a "bad precedent" for the federal government to interfere in carriage talks
between the networks and DBS carriers, whether or not the broadcasters intend to seek
retransmission-consent payments from DBS.
"All we are trying to preserve is that the marketplace
permits us to enter into that negotiation," Okun said.
The networks are targeting a provision in the House bill
(H.R. 1554) that would ban exclusive retransmission-consent deals between cable operators
and broadcasters and bar broadcasters from engaging in "discriminatory practices,
understandings, arrangements and activities that prevent satellite carriers from
obtaining retransmission consent." The provision would expire in 2006.
In their letter, the network chiefs said they had
"every incentive to negotiate fair and reasonable local retransmission-consent
agreements" because they want DBS to deliver local TV signals, rather than importing
Satellite Broadcasting & Communications Association
chairman Chuck Hewitt responded with a statement urging Congress "not to be overly
optimistic that 'market-based conditions' will ensure efficient retransmission-consent
agreements that will benefit consumers."
Cable has cut retransmission deals with broadcasters from a
position of strength that the satellite carriers, with much less market share, cannot
command, the statement said, noting that the recent Fox-EchoStar Communications Corp.
retransmission deal came from settling a huge lawsuit between the companies, and not from
Karen Watson, EchoStar's Washington lobbyist, said the
House bill's language was harmless to broadcasters, assuming that they are willing to
treat DBS carriers fairly.
"If they plan to negotiate fair and reasonable
agreements, then why would they object to language that says that they should?" she
asked. "EchoStar has no market power, and it is vulnerable to unfair and
discriminatory retransmission-consent agreements."
A Fox source said the company has no interest in saddling
DBS carriers with onerous retransmission-consent fees. "We want to see this platform
succeed. It's in our interest to do that," the source said. Fox parent News Corp.
owns 14.6 percent of EchoStar.
The legislation would also address retransmission consent
for distant network signals. Under the House bill, DBS carriers would lose their
retransmission-consent exemption for distant network signals seven months after passage.
The Senate bill (S. 247) has an exemption with no sunset.