Senate Gets Retrans Earful Before Hearing

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While the Senate Communications Subcommittee was preparing to hear from executives at Cablevision, Time Warner Cable, News Corp., Univision and Ovation about the retransmission consent process in a hearing Wednesday afternoon, plenty of others were weighing in beforehand with their own informal testimony.

In a letter to Subcommittee chairman John Kerry (D-Mass.), American Cable Association president Matt Polka said he shared Kerry's view that the regulatory regime is broken and does not protect consumers. Kerry has introduced legislation to reform the system and give the FCC more power to intervene if necessary. "All available evidence suggests the current regulatory structure results in significantly higher retransmission consent fees, generating higher costs for consumers and hindering our efforts to deploy broadband and other programming options," said Polka.
ACA is pushing a petition to the FCC to reform the system along similar lines to Kerry's bill, and gave the Senator a shout-out for his support for FCC action on the petition.

Free Press is glad the subcommittee was looking to prevent "blackouts" during future retrans fights. "The fact is, when companies disagree over carriage fees and pull channels, it is consumers who are caught in the middle, while they fight over our money," said Free Press political advisor Joel Kelsey, who put in a plug for transparency and a la carte. ""Programmers should get fair market value for their programming, but it's impossible to know what the market will bear when all the prices are secret. We need to ensure the process of negotiating carriage fees is transparent, and that the revenue generated through these fees by reaching into subscribers' pockets is providing some benefit," he said. "Ultimately, consumers should know what they are paying for each channel, and should have the option to choose to pay for only the channels they want."

Not represented at the hearing was the Organization for the Promotion and Advancement of Small Telecommunications Companies. but that did not stop them from calling on the subcommittee and the FCC to reform retrans, saying it was important for boosting broadband adoption.

That hits right in the FCC's sweet spot given the importance of its National Broadband Plan.
"Retransmission-consent reform is equally vital to both enhancing consumer choice in the video market, and to encouraging broadband adoption," OPASTCO president John Rose said in a statement in advance of the hearing.
He said that rural carrier that can deliver video--like TV station signas--alongside their broadband offerings have 24% higher subscription rates than those offering stand-alone broadband.

Rose praised the congressional inquiry into retrans, but told the FCC not to wait around. "While Congress continues to examine this issue, we call upon the Federal Communications Commission to use its statutory authority to reform the current rules without further delay," he said.

The FCC itself has recognized the value of TV service in driving broadband adoption, though it has been focusing not on the value of TV stations but of TV sets. The commission is currently considering whether and how to create a universal gateway device--one ring to unite them all, as it were--that can bring together traditional multichannel video with broadcast TV and broadband services through the TV given that while only about 75%-80% of homes have computers, more like 99% have a TV set.
Also weighing in from the sidelines is ivi TV, the over-the-top video provider that is streaming station signals without having negotiated retrans payments (broadcasters, including Fox, are battling the company in court
"Consumers should not be used as pawns any longer in big media's chess game over control of the public airwaves. Instead of fewer options and higher fees," said Todd Weaver, ivi TV CEO Todd Weaver in a statement. "They should have more control over their own entertainment options, which is possible with innovations like ivi TV."
Ivi pitched Cablevision on the idea of paying for ivi subscriptions ($4.99 per month) for its cable subs during the retrans impasse so viewers could access Fox content. Cablevision said at the time it was unaware of the pitch.
An ivi TV spokesman said the company got a 320% boost in subscriptions in the New York market anyway. Fox stations were off Cablevision systems in New York and Philly.

Weaver also put in a plug for a la carte. "A subscriber should be able to opt-in or opt-out of paying for individual channels," he said. "Doing so would allow any per channel price be made transparent, and give consumer choice..."
Fox briefly blocked Cablevision subs' access to its content online via Hulu and Fox Web sites, but reinstated it since not all Cablevision broadband subs are also video subscribers, according to a source.