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Kerry On Retrans: Consumers Getting Screwed And Something Has To Change

At issue in retransmission consent disputes are the fees broadcasters are seeking from cable operators, but too often those lead to ads and web sites calling each other greedy, followed by signal pulling, and continuing recrimination and consumer uncertainty.

That was the opening message from Senate Communications Subcommittee Chairman John Kerry (D-Mass.) at a hearing Nov. 17 on retransmission consent.

He said that when consumers keep coming back to Congress saying they are being screwed, it is time to do something. "Regular everyday people get caught in the middle," he said, "and that is precisely what brings us here today."

Commerce Committee Chairman Jay Rockefeller (D-W. Va.) went further, saying in his opening statement that it was time to look at more than retrans. He said his committee would look into cable rates and a la carte, saying the system of packaging and distributing programming is broken and may serve companies, but not consumers. Rockefeller said the retrans hearing was a good step, but did not address the root problem.

Rockefeller also took aim at entertainment ("a race to the bottom") and news. He said that rather than having a watchdog, the public was subjected to the "endless barking" of the 24-hour news cycle from media "ravenous for the next rumor but insufficiently hungry for the facts that nourish Democracy." Addressing the cable and broadcast executives at the witness table, he said they were partly responsible for the dumbing down of America.

He said he was tired of the right vs. the left, and added that there was a "little bug" presumably in his ear, that made him want to tell the FCC "to say to Fox and MSNBC: 'out, off, and goodbye.'" He said that would be a "big favor to political discourse."

Rockefeller hammered on cable rates--citing the three times the rate of inflation figure--and a la carte, asking why consumers had to order so many channels when they watched so few.

Kerry called the hearing after drafting a bill that would impose fines for bad-faith bargaining, mandate standstill agreements that keep TV station signals on the air during retrans impasses, and would make the FCC a mediator, but not arbitrator, of the disputes. FCC Chairman Julius Genachowski supports the congressional inquiry, though he has not weighed in on the bill specifically.

Kerry has said that at the end of the day, the broadcaster will retain the right to pull a signal when there is a "good faith" impasse, but that the end of the day would come only after the FCC stepped in to evaluate both parties demands and recommend, or not recommend, outside arbitration. At the hearing, Kerry said he wanted to make sure that his commitment was not to any particular legislative option, but to consumer protection.

Without more transparency and FCC oversight, he said Wednesday, independent programming will be crowded out and prices will continue to rise.

Kerry last month signaled he would introduce the bill following the Fox/Cablevision retrans impasse. He did not blame either side, but said the bill was to protect consumers whose lives are "disrupted" by the retrans fights.

Both Cablevision COO Tom Rutledge and News Corp. President Chase Carey were at the hearing to give their respective sides of the story. Cable's side is that the system is skewed toward broadcasters and the government needs to step in, while broadcasters say it is a free market negotiation that is working just fine, particularly as broadcasters begin to get cash for their valuable signals.