Small Ops Seek FCC Probe of Broadcasters

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Small cable operators want the major broadcast networks and some
affiliate-group owners investigated for allegedly using retransmission consent
as a hammer to secure cable carriage of their cable networks at unfair terms and
conditions.

The American Cable Association, which represents hundreds of small operators
around the country, asked the Federal Communications Commission to launch an
inquiry into the bargaining practices of The Walt Disney Co., General Electric
Co. and News Corp., all of which own TV networks, TV stations and numerous cable
networks.

The ACA's chief accusation is that the broadcasting powerhouses refuse to
allow cable carriage of their local TV stations unless the cable operators agree
to carry their cable networks and pay prices the cable operators consider too
high.

The broadcasters' bundling power, the ACA charged, is producing higher cable
rates and crowding out cable networks unaffiliated with the broadcasters.

'These tying arrangements harm smaller cable companies and their customers by
increasing basic-cable costs and decreasing programming choices,' the ACA, based
in Pittsburgh, said in the 16-page filing.

The ACA deliberately picked Oct. 1 to file with the FCC. It is also the first
day of the current round of retransmission-consent negotiations, which occur
every three years and last three months unless the parties agree to
extensions.

'The upcoming round of retransmission consent is imminent. ACA members fear
the worst,' the trade group's filing said.

Preston Padden, Disney's executive vice president of worldwide government
relations, said the company does not insist that access to an ABC station must
be linked to the purchase of a cable network, such as ESPN.

'We
always offer the option of a stand-alone cash retransmission deal for ABC, and
the packages of other services are offered as a convenience for those cable
operators that don't wish to pay cash for ABC,' Padden said.

He
added that the practice of carrying a broadcaster's cable network in lieu
of a straight cash deal for the station originated with the cable industry a
decade ago.

The four major networks -- ABC, CBS, NBC and Fox -- have developed into
cable-programming giants. According to the National Cable &
Telecommunications Association, the four majors have an ownership interest in at
least 70 cable networks.

TV stations won the right to demand cash and other
compensation from cable operators in the 1992 Cable Act.

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