Genachowski: Open to Helping Smaller Cable Ops With Retrans Issues

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Federal Communications Commission chairman Julius Genachowski told an American Cable Association audience in Washington Wednesday that the commission was "open" to finding a way to insure that smaller cable operators aren't disproportionately affected by retransmission consent negotiations with larger station groups and networks.

"That is something that the ACA and the commissioner and ACA should continue to talk about," Genachowski told ACA president Matt Polka in a morning Q&A.

That would be just fine with ACA, though there could be more talk -- say, advice to Congress -- than action out of the commission, at least via its open retrans rulemaking, especially given that the chairman continues to say the FCC has little authority over the workings of that system. For their part, cable ops say the system is arcane, outmoded and skewed toward bigger broadcast players.

Genachowski applauded the relative lack of retrans blackouts in the most recent cycle, something ACA execs saw somewhat differently.

The chairman was addressing the ACA's Annual Summit, a forum where representatives of smaller and mid-sized cable operators take to the Hill to push for retrans reform, among other things (coincidentally, the same week that broadcasters are visiting their legislators and regulators to argue for leaving retrans alone).

Asked for his take on the latest round or retrans negotiations, Genachowski said: "We were pleased that the number of blackouts and serious instances of consumer disruption were minimal," he said. The FCC chairman also said he recognized it took "real work" on the part of cable operators and broadcasters.

In a briefing with reporters following the speech, ACA officials suggested that, at least in the case of their members, it was not so much a case of having worked it out as it was of eventual capitulation to broadcasters who have undue power in the negotiation.

Colleen Abdoulah, ACA chair and CEO of WoW! Internet, said that blackouts were not the only barometer. "Competitively, you have no choice. Pretty much all of us are in competitive markets, and if your competitor has this product, you've got to have it. So you buck up, swallow enormous increases, pass what you can on to customers and take the hit on your margins, which affects your ability to provide advance services." Genachowski had earlier urged ACA members to consider building out to unserved areas -- with government help -- as both a business proposition and a community service.

"When the chairman says we had a good retrans round," said Steve Friedman, past ACA chairman and COO of Wave Broadband, "the reason we didn't drop anything is we had no choice. In my company, we don't do things to our customer."

Genachowski took a bit off his rosy retrans outlook, conceding the FCC does not have a "clear picture" of what was happening in those retrans deals, but was getting in put. That includes from ACA, which has been pushing the commission to ask for some of the contract terms cable ops are prevented from making public due to broadcaster-imposed nondisclosure agreements.

While Genachowski said the FCC had heard the concerns from ACA members and consumers -- which was why the commission launched its retrans proceeding a year ago -- he did not suggest any action in that docket was forthcoming. He called it an opportunity "to look at what the FCC's options are, the ways the marketplace has changed over the years, and whether there are recommendations we can make to Congress."

In terms of those FCC options, he reiterated that the FCC's authority is "very limited" to "revise the way the system works," or in ACA's view, works to the benefit of broadcasters rather than consumers or cable operators.

ACA officials conceded Wednesday they did not expect help from the Hill in terms of proposed legislation to sweep away retrans, a bill they applaud, but one that almost certainly won't pass. But they said it was useful in keeping the conversation going, and saw some hope for FCC action in Genachowski's recognition of the impact of retrans and other regs on smaller operators.

While the retrans docket is not likely to heat up anytime soon, the FCC could address issues like joint retrans bargaining through its ownership rule or localism reviews, or its review of program-access rules.

Asked about the FCC review of its dual analog/digital and HD carriage mandates currently under review per a June 12 deadline, the chairman would only say that if the record showed smaller operators should continue to get a waiver from the HD mandate, that's what the FCC would do.

No news flash there, but he used the issue to make the point that the record matters. "Data-driven" has been a mantra of the Genachowski commission nearly to the point of parody. He said ACA should continue to make its case. "It is worth your time and effort to make sure we have the record that we need. If we have the record, we'll do the right thing."

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