The cable-television industry must seek significant changes in laws governing relationships with broadcasters, the chairman of Mediacom Communications said Monday after his company came to terms with Sinclair Broadcast Group late Friday to carry the signals of its 23 TV stations in 16 markets.
The pact put Sinclair stations back on Mediacom systems after two months of darkness just in time for Sunday’s Super Bowl championship game in professional football.
“The industry has some major issues to face,” Rocco Commisso said in an interview with Multichannel News Monday morning.
Commisso and Mediacom officials have not disclosed terms of the agreement reached Friday with Sinclair after a long, contentious dispute.
But the case may wind up buttressing broadcasters’ contentions that they should be paid for the signals of their local TV stations. Mediacom may have agreed to pay as much as 50 cents per subscriber, per month for each of Sinclair’s stations, according to one party close to the company. The Wall Street Journal Monday put the payments in the range of 40-50 cents.
Those payments will likely get passed on to Mediacom’s customers at some point. But Commisso said his company doesn’t have any other major renewals of contracts with broadcasters coming up for another couple of years.
Nonetheless, Mediacom is one of the nation’s 10 largest cable operators, with approximately 1.4 million subscribers. About 700,000 of those subscribers were affected by the blackout of Sinclair stations.
Mediacom handed out over-the-air antennas to customers to help them get the signals while the dispute went on. Sinclair offered rebates to those Mediacom subscribers who agreed to switch over to the DirecTV direct-broadcast satellite service.
And while Sinclair pulled its signals from Mediacom systems Dec. 1, the broadcaster came to terms with a larger operator -- Time Warner Cable, which serves 13.5 million customers -- in mid-January.
Commisso Monday said Congress should look again at the rules governing how cable operators and broadcasters deal with each other over the carriage of local TV station signals on cable systems.
His set of prescriptions:
• 1:Discrimination should not be acceptable. Rates afforded to large operators should also be afforded to small operators. All small operators, for instance, compete with DBS services that have more than 10 million subscribers.
• 2:Local monopolies on broadcast-TV signals should be eliminated. Cable operators should be allowed to import signals when there is an impasse. Competition should be fostered in local markets.
• 3:Anticompetitive marketing campaigns should be outlawed. A broadcaster should not be allowed to subsidize customers to switch to another provider of multichannel-video services, such as occurred in this case.
• 4:Eliminate the requirement that broadcast TV stations be part of the basic tier of cable programming. If broadcasters’ signals can be placed on a separate tier of service, as occurs on satellite services, they should be separable on cable, as well.
• 5:Treat broadcast networks like cable networks. Cable operators shouldn’t be forced to distribute local TV signals to 100% of their subscribers and should be able to make agreements directly with national networks to take their full lineups or individual shows.
• 6:Allow operators to share in the revenue. Cable operators should be entitled to two minutes of advertising per hour. In effect, cable operators, if they’re paying for carriage of a network, should also get to share in the revenue generated by having that network on their systems.
• 7:Stop further relaxation of rules governing consolidation of media operations. Particularly, no broadcaster should be allowed to own or operate more than one TV station in a market.
Imagine what would happen if broadcasters had two or three stations in a market, the right to charge for each of those stations and force carriage of them to 100% of the subscribers in each market, Commisso said, adding, “They’d put you in bankruptcy.”
Broadcasters should be required to establish rates and publish their rate cards so that the same rates are available to all multichannel pay service providers.
And whatever the price may be, the price shouldn’t be based on the leverage a broadcaster holds over a cable operator. The pricing should be based on a rate card, “where no one is discriminated against,” he said.
In any case, “The consumer should not go dark,” Commisso added.
In this case, Commisso placed blame for the outcome squarely on the shoulders of Federal Communications Commission chairman Kevin J. Martin.
Commisso had urged Martin to force binding arbitration in the dispute with Sinclair. Mediacom last month, producing a set of comments made by Sen. Daniel Inouye (D-Hawaii) indicating that the lawmaker believed the FCC did have the authority to mandate arbitration. Those comments came in 1992, when rules governing getting consent to retransmit broadcast-TV signals were first established.
Martin more than once said he wasn’t sure that the FCC had the power to mandate arbitration.
But, Commisso said Monday, “The FCC could have easily done it. If we had a different chairman, that would have taken place, guaranteed. Just change the chairman, and you’ll see what different results you would have gotten.”