Spats Over Retransmission Down to Wire

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Several retransmission-consent disputes were threatening to boil over as of late last week, with a number of TV stations on the verge of pulling their signals off cable systems in the early hours of New Year’s Day.

As of press time Friday, the biggest simmering hot spot seemed to be in Corpus Christi, Texas, where more than 100,000 Time Warner Cable subscribers faced losing KIII, the local ABC affiliate owned by McKinnon Broadcasting.

It also appeared that Cox Communications Inc. was going to lose an NBC affiliate, KYTV, from several systems in Missouri and Arkansas, affecting 19,300 subscribers.

If deals weren’t reached, KIII and KYTV would be pulled off Time Warner and Cox at the end of the day Dec. 31.

ROSE BOWL THORN

That loss would hit particularly hard in Corpus Christi, since ABC carries the Rose Bowl this Wednesday, a game that will pit the University of Texas Longhorns — local favorites — against the University of Southern California. Time Warner has set up four viewing parties for the game, where it will give away HDTV sets, according to company spokesman Keith Cocozza.

But all these standoffs could be resolved at the eleventh hour.

Late last week, a KIII official said the station had reached a verbal agreement with Charter Communications Inc., which has about 10,000 subscribers in Corpus Christi, and was close to reaching a pact with Cable One Inc., which has about 6,000 homes in the market.

“We have verbally agreed” with Charter, KIII general manager Dick Drilling said. “They’re looking at the language [of the contract] now. I don’t anticipate a problem with that.

“Cable One, we’re very close. I’m optimistic that we’re going to get something done with Cable One as well. Time Warner, there’s been no movement. It’s going to go right down to the wire.”

Retransmission-consent agreements between cable operators and TV stations across the country were set to expire Dec. 31. Broadcasters and cable operators have been working feverishly to complete their retransmission-consent renewals before the year-end deadline, and a batch of such deals were announced in recent weeks.

Under federal regulations, broadcasters can either opt for “must-carry,” or guaranteed carriage without compensation, or demand retransmission consent for their signals.

Under retransmission consent, cable operators must negotiate with stations to get permission to distribute their signals. In 2005, TV stations were more aggressive about seeking cash for such carriage, arguing that their high-rated programming warrants license fees just like cable networks are paid.

UNSURE OF SCHURZ

One of the unresolved situations was between Cox and Springfield, Mo.-based NBC affiliate KYTV, which is owned by Schurz Communications Inc. and multicasts UPN’s signal. If ongoing negotiations failed to produce a deal, as of Dec. 31 Cox would lose the station in Branson and Monett, Mo., and in Berryville, Ark., according to Cox spokeswoman Stephanie Davis.

“We’re trying to control our costs. When we receive excessive compensation demands to carry stations, then we have to stand our ground for our customers,” she said, adding that subscribers in two of these cities would still get NBC programming via other stations in their area.

KYTV general manager Michael Scott noted he had reached deals with 22 cable systems, which had found the station’s terms acceptable, unlike Cox. “We do not want to go off,” he said, though he added, “we are at an impasse.”

With the Dec. 31 deadline looming, Bresnan Communications and a broadcaster in Wyoming, WyoMedia Corp., reached a retransmission-consent deal involving eight TV stations last Thursday, according to Steve Brookstein, the cable firm’s executive vice president of operations.

Brookstein and Mark Nalbone, WyoMedia’s general manager, declined to discuss the exact terms of the new retransmission-consent agreement. But the broadcaster had voiced its willingness to accept advertising commitments, and equipment to help in the digital conversion of its stations, in exchange for giving Bresnan permission to carry its stations.

Initially, the broadcaster had been seeking monthly license fees from Bresnan in the neighborhood of 12 cents in cash.

New Year’s would have marked the first anniversary of a retransmission-consent battle that resulted in stations being pulled from Cable One and Cox systems. During the past few months, Nexstar Broadcasting Group Inc. and Mission Broadcasting Inc. finally completed retransmission-consent agreements with both those cable operators that ended their nearly year-long dispute.

Recently, Nexstar has also inked agreements with Insight Communications Co., Comcast Corp. and Atlantic Broadband, according to Duane Lammers, Nexstar’s executive vice president.

Just last week, Sinclair Broadcast Group Inc. did a multiyear retransmission-consent deal with Verizon Communications for its new FiOS TV multichannel-video service. Sinclair recently also forged agreements with Insight and WideOpenWest LLC.

'MORE CASH DEMANDS’

“There are a lot deals that are coming down to the wire, kind of as we predicted,” said Matt Polka, president of the American Cable Association, a lobbying group for small cable operators. “We predicted that there would be many more cash demands, which has occurred. We predicted that the cost of retransmission consent would increase, which it has, whether through direct cash payments or through other consideration. So that price has increased.”

Gannett Broadcasting, among those demanding cash for carriage, was involved in at least two retransmission-consent disputes as of late last week. Cable One was balking at paying cash to continue carrying a Gannett station, NBC affiliate KPNX in Phoenix. The cable operator uplinks the station, at a cost of $1 million a year, to communities in central and northern Arizona.

As of Friday, Cable One was awaiting word on whether KPNX would grant an extension, according to Julie Laulis, vice president of operations for the operator’s Southwest division.

The broadcaster is also involved in a retransmission-consent beef with a 6,000-subscriber operator in Georgia, Kingsland Cable TV of Kingsland. Gannett is demanding a license fee of 35 cents per month, per subscriber from Kingsland for each of its two TV stations, WTLV and WJXX, according to the system’s owner, Don Trednick.

A Gannett spokeswoman declined to comment last week.

FREE A/B SWITCHES

Time Warner, which has handed out free A/B switches, has said that KIII was seeking what amounted to $500,000 to continue carrying the station. KIII general manager Dick Drilling denied that.

“We have other things we are talking and negotiating about,” he said. “Cash is not in the equation.”

The year-long dispute between Nexstar and Cox and Cable One was triggered by the cash-for-carriage issue.

“At the time of our impasse with Nexstar/Mission, we believed it was important to be consistent with our position that we would not pay a per-month subscriber cash fee,” said Tom Basinger, vice president of Cable One’s central division. “While we cannot disclose the terms of our deal with Nexstar, we can say it sets no precedent for Cable One, is consistent with our long-standing and public retransmission principles, and is based upon a mutually beneficial resolution.”

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