February 10, 2003

Retrans Consent Deals Get Tougher Every Day

BY K. C. NEEL

The American Cable Association has toyed with the idea of supporting digital must-carry as a way of working around retransmission consent negotiations, but ACA president Matt Polka doesn't think the idea will pan out with broadcasters.

He may be right. In Ohio, Massillon Cable has offered to carry both the analog and digital signal of each broadcaster in its 47,000-subscriber territory in exchange for free carriage of those signals. But broadcasters weren't persuaded.

“Rather than fight with the broadcasters [over retransmission consent], I tried to give them what I thought they wanted,” said Massillon president Bob Gessner. “I told them I'd guarantee carriage of their analog signal for 12 years and I'd give them the spectrum to carry their digital signal as well. But so far, no one has taken me up on the offer.”

“We've toyed with the idea of supporting digital must-carry,” says ACA's Polka. “I'd love to hear broadcasters' response to that policy. But I don't think it would fly because I think it's more about the money and bundling than it is about carriage of their signal.”

In a filing with the FCC last week, ACA claimed “network owners demand tying arrangements or sham cash ‘alternatives’ of on average $0.70 per customer per month. Gannett and Cox Broadcasting are demanding strictly cash for carriage, take it or leave it.”

To be sure, retransmission consent negotiations between broadcasters and smaller operators, which generally occur every three years, have been particularly egregious this time around. ACA says at least eight cable operators have dropped local broadcast signals and more deletions are likely.

Things have gotten so bad for independent operators that ACA wants the FCC to get rid of retransmission consent laws altogether. The FCC “must examine how network owners and major affiliate groups exploit retransmission consent when dealing with small cable companies,” ACA said in its filing. “For example, Gannett has deployed a national strategy of demanding that small cable companies pay between $0.15 and $1 per subscriber per month. Disney and Hearst-Argyle are demanding $0.70 per subscriber per month if a cable operator will not agree to their tying arrangement. Cox Broadcasting is demanding up to $0.30 per subscriber.”

Back in Ohio, broadcasters didn't want to talk about their negotiations with Massillon. However, late last week, one Cleveland broadcaster who asked to remain anonymous said he'd signed a deal with Massillon. “We're set for another three years,” he said, declining to provide specifics. “But I didn't say it was Bob's deal.”

Cable operators that have dropped broadcast signals because they failed to cut new retransmission consent terms: