Polka to Independents: Deluge Senators on Retrans

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Henderson, Nev. -- Independent cable-system operators are being urged to shower U.S. senators over the next two days with phone calls from key executives, employees and customers urging action to reshape rules governing the retransmission of broadcasters’ TV signals in their markets.

American Cable Association CEO Matthew M. Polka Tuesday morning called for independent operators to call members of the U.S. Senate Commerce Committee between now and Thursday to heighten awareness that widespread outages of local TV programming could be at hand and that cable rates could rise dramatically as broadcasters and operators dispute what to pay for the carriage of local TV signals.

The committee, now led by Democrats, is scheduled to hold a hearing Thursday on the policies and practices of the Federal Communications Commission. Its chairman, Kevin Martin, is Republican, and he has declined to force the commission to intervene in retransmission disputes. Daniel Inouye (D-Hawaii) is the newly installed ranking member on the Senate Commerce Committee.

“This is not something we can win on the academic merit and substance of our arguments,” Polka said. “We win on the strength of our political message and the recognition on the part of Congress that there is a consumer need to be addressed.”

He added in an interview with Multichannel News that he will urge the 1,100 members of his association -- which represent more than 10 million cable-TV subscribers nationwide -- to tell senators that the FCC has avoided taking any action to solve retransmission disputes, such as that currently underway between Sinclair Broadcast Group and Mediacom Communications. Right now, about 700,000 Mediacom subscribers are unable to receive CBS, Fox, NBC, or ABC signals from local affiliates of those networks from Sinclair.

Polka took to the stage at an educational workshop here presented by the National Cable Television Cooperative to make his pitch for fast grassroots lobbying of senators by independent cable operators. The NCTC is a hardware- and programming-purchasing organization that serves independent operators.

Large MSOs -- such as Time Warner Cable, which serves 13.5 million subscribers -- have shown greater ability to come to terms with broadcasters. Time Warner earlier this month came to a new retransmission pact with Sinclair that included agreement to carry new digital channels Sinclair would broadcast.

But more than one-half of the ACA’s membership serves fewer than 5,000 subscribers each. Operators of those sizes have little power, Polka said, and they are likely to have to take whatever deal is presented them by local broadcasters.

If they are charged $1 per month, per subscriber by five different local broadcast affiliates, that’s $5 per month that would have to be passed on to all subscribers.

If broadcasters get to charge monthly fees, operators should be allowed to determine whether to keep those channels in their basic-programming lineups or not, Polka added.

By law, cable operators currently must carry local broadcasters’ signals on their basic tiers of programming, regardless of the costs that must be passed on. Polka argued that operators should have the right to bundle broadcast signals and the fees for them into a broadcast tier of programming, if they choose, so that only those subscribers who want those signals and are willing to pay for them do.

The same principle, he said, should apply to sports programming, such as ESPN and regional sports networks, the costs of which should be borne by those subscribers who actually want sports programming, and not necessarily by all subscribers.

Polka said he would urge members to organize grassroots lobbying efforts overnight that would tell senators that they “would be held responsible” for any losses of service and spikes in cable rates if retransmission disputes become widespread.

Operators should ask themselves, “What do we need to win?” and get all constituencies they can appeal to, to in turn appeal to the senators, he added. These include not just their own management teams, but employees -- whose jobs may depend on the outcome -- and customers, who would have to pay higher rates, as well.

“Let me give you a secret here,” Polka said in addressing the audience at the workshop. “Congress is not going to act and fix these things because of us. They’re going to do so because of your customers.”

Since the practice of compensating broadcasters for the right to retransmit local signals emerged as part of the 1992 Cable Act, cable operators have typically avoided making any cash payments to broadcasters for those rights. Instead, they have agreed to carry new programming channels they have launched and offered marketing programs and other compensation, instead.

But broadcasters -- most notably Les Moonves of CBS -- have become strident in the past year about now demanding cash. They equate the value of what they produce locally to that of ESPN, Fox News Channel or any other network for which operators already pay monthly per-subscriber fees.

Polka, on stage, called for the grassroots lobbying to continue beyond Thursday’s oversight hearing.

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