Ovation Chief Says Retrans System Threatens Indie Nets

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 Charlie Segars, chairman of independent arts cable net Ovation, says his channel has been successful in gaining carriage, including from the largest carrier--Comcast, Time Warner Cable, DirecTV, DISH--and that he has gotten a fair price for his content, but that doesn't mean he does not have major concerns about the current content negotiation process when TV station signals are in the mix.

Segars plans to tell a panel just that, according to his written testimony for a Senate Communications Subcommittee hearing Nov. 17 at 3 p.m. (ET) on the retransmission-consent regime.

So, if he has "earned" carriage and cable operators are not refusing to give him fair value for his signal, what is his beef with the carriage negotiation process? He sees independents like his own network being a potential casualty of rising TV station prices.

The problem, Seagars says in his prepared testimony, is that TV station operators are trying to get paid twice, once through cash for their TV station signals, and again through fee increases for the co-owned cable channels they were able to launch and grow through the retransmission consent system.

Cable operators, which he said believe they were forced to carry and pay for networks they did not want -- in order to get the TV station signals they did want -- now must also pay for those "free" over-the-air signals, "at a cost that adversetly affects their ability to affordably provide TV to their subscribers."

That last part is the key to Seagars' criticism as far as the fate of his own network is concerned. He says the "last remaining independents" are caught between the powerful distributors and well-operated, vertically integrated media companies."

"With retransmission fees likely to top $1.3 billion by 2012, distributors will have to look to their customers to make up some of the difference," he says. "And they will have to aggressively cut programming costs too. Independent networks, with no service bundling advantage through retransmission, and little leverage, despite delivering under-served categories like the arts, will be targeted."

Segars argues that if broadcasters get to use the public airwaves to "extra payment for historically free TV service," then they should be allowed to bundle other programming in those deals, and if there is going to be outside arbitration, he wants it to include not just TV stations, but independent cable nets.