Washington -- Cebridge Connections CEO Jerald Kent wants Congress and the Federal Communications Commission to help ensure that big media companies can’t exercise too much financial leverage in their relationships with small distributors.
“We aren’t asking for handouts: We’re just trying to survive in as many rural markets as we can,” Kent said Monday in a speech to the American Cable Association’s annual summit here. “Something needs to be done or there’s going to be a train wreck by the end of this year.”
In the fall, the window opens for TV stations to demand carriage terms from cable systems. Some TV stations, searching for a second revenue stream, are expected to demand cash for carriage. That’s unacceptable, Kent claimed, because TV stations provide service to the public free-of-charge, and they obtained their radio spectrum from the federal government at no cost.
If TV stations press for cash, he added, “I see broadcast signals being pulled from lineups if nothing is done.”
His first idea was support for the ACA’s petition at the FCC that would permit small cable companies to import with permission network affiliates of ABC, CBS, NBC and Fox if the in-market affiliates demanded cash for carriage.
“Competition is the best governor on pricing,” Kent said. “Let us shop for alternatives just like our customers are allowed to do.”
Cebridge has 400,000 cable customers in rural markets and the largest private portfolio of telecommunications towers in the United States.
Broadcasters are fighting the ACA’s proposal, saying that it would be harmful to the network-affiliate relationship, which is built on local exclusivity.
"Kent's proposal would destroy the fundamental concept of localism upon which broadcasting is based,” said Dennis Wharton, spokesman for the National Association of Broadcasters. “The real question for cable operators is this: If DirecTV [Inc.] and [EchoStar Communications Corp.’s] Dish Network can compensate local broadcasters for our valuable programming, why are small retransmission-consent payments such a burden for cable gatekeepers who routinely raise rates three to six times the rate of inflation?”
In a related idea, Kent said no TV station should be allowed to invoke retransmission consent with a cable system that serves fewer than 20% of the homes in a designated market area. The U.S. has 210 DMAs, with the top 100 containing about 85% of all U.S. households.