The National Cable & Telecommunications Association under President Kyle McSlarrow has historically refrained from asking for government intervention in the cable business, except to remove regulations that are arguably themselves a government thumb on the scale. That way, the industry can speak consistently and with the requisite moral authority when arguing against government intervention in its business.
We think that is the wise course in navigating a retrans landscape that is likely to remain contentious as powerful companies jockey for position.
Cablevision, looking for leverage in its recent stalled negotiations, called loudly for government help at almost every turn. That certainly got the attention of Washington. Senator John Kerry (D-Mass.), who remains chairman of the Senate Communications Subcommittee, has pledged to introduce legislation revamping retrans. A hearing has been scheduled in the Senate on the issue for this month, and FCC Chairman Julius Genachowski has come out in support of Congress reviewing the system.
Meanwhile, opponents of the Comcast/NBCU deal sued to argue for online access conditions after Fox briefly blocked its programming on the Web.
The Republican changeover in the House will likely slow that momentum for government action. But Republicans have sports fans in their districts, too, and could be under pressure from constituents to keep games on the air, particularly if cable operators are complicit in generating a “consumer” backlash.
We understand why cable operators are pushing for more government oversight, but they must beware the two-sided axe of calls for regulation.
Ultimately, we don’t see a major retrans revamp anytime soon. However, the push by cable operators to get either Congress or the FCC to pitch it as a consumer issue sets an unfortunate precedent for the next time the government decides it needs to step in to, say, mandate minimum broadband speeds, set prices, mandate an all-video standard or... well, you get the idea.
We know sports is high-value programming. But it is television, not the polio vaccine. There are changes going on in carriage negotiations, spurred by a bad economy and the maturation of the cable nets that used to be the primary currency of carriage.
Yes, there are many associated issues. But retrans is essentially a marketplace negotiation—and the less the government has to do with it, the better.
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