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Network Affiliates Join Together On 'Split Market' Issue

The chairs of the ABC and Fox affiliate associations have joined with their counterparts at CBS and NBC to ask Congress not to give satellite and cable companies "a free copyright license to televise the same, duplicating broadcast entertainment and sports programming that local television stations buy in the open market."

They pulled out all the stops invoking the economic crisis, the broadband stimulus package and suggesting multichannel video would rule the media universe.

Congress is currently considering ways to address the so-called "split market" issue as part of reauthorizing satellite operators' blanket license to retransmit TV signals. Those are markets that cross state lines, creating the situation where, say, viewers in Colorado are getting local stations from New Mexico.

Satellite companies have been pushing for the change, saying it is a consumer-friendly fix to an outdated DMA system.

Cable operators may or may not be included in the change. But if satellite operators get to import the signals, the American Cable Association says its members should have the same right.

Likely helping prod the flurry of letters on the subject is the draft of a bill floating around from Rep. Mike Ross of Arkansas that would allow multichannel video providers, cable as well as satellite, to retransmit in-state TV signals in split markets. The bill would waive the nonduplication rules in that instance, and would not allow retrans deals to be written so as to prevent distant signal importation to adjacent "underserved" areas.

"Rep. Ross has identified one of the biggest problems with our overly regulated television market system that now dates back to the 1950s," said ACA president and CEO Matthew Polka,"namely that some consumers are unable to receive television stations from their own state - an issue of localism that cable operators hear about from their customers as well. Cable has the technological ability to solve this problem, and we are pleased to be part of the solution in Rep. Ross' bill."

"A television broadcast station that elects retransmission consent may not request as a condition to receiving retransmission consent that a multichannel video programming distributor not exercise its right to carry any other broadcast station," a draft of the bill dated March 30 reads.

Broadcasters argue that they have paid for the exclusive rights to import valuable syndicated programming. Allowing satellite and, potentially, cable operators to import duplicative programming would constitute a "free copyright license" that would "drive local TV stations out of business," said ABC affiliate board chairman Darrell Brown in a letter to House Energy & Commerce Committee Chairman Henry Waxman (D-CA).

Brown says that without territorial exclusivity, networks, sports leagues and studios will move their content to cable and satellite, which would be "unfair to your constituents and local viewers," he tells Waxman.

Brown points out that cable and satellite can already import in-state weather and news to viewers in split markets just by asking the distant stations who have always said yes, he adds. And on the issue of sports, Brown suggests that they resolve the issue of split markets where viewers may not be getting the games of their home-state teams, either the NFL or NCAA could allow local stations to broadcast those games. "We urge you to ask the sports leagues and the NCAA to make games of local interest to your constituents available for broadcast on your local stations," he says.

Brown painted a gloomy picture for broadcasters that would only darken if Congress adopted the change.

"Local television station personnel are being laid off and furloughed in record numbers, and many of these stations are now in receivership," he said. "It is difficult to believe Congress would seriously consider giving pay cable and satellite companies an unfair competitive advantage of this kind over free, local, over-the-air television service."

In his letter, also to Waxman, Fox Affiliate Board Chairman John Tupper echoes Brown's concern  saying that granting satellite and cable a license to import duplicative programming would be a back door reform of the retransmission consent process that will drive local TV stations off the air.

"This proposal is a not-so-subtle strategy for eliminating retransmission consent fees paid by cable and satellite operators," he wrote. "When local broadcast television stations are bankrupted by this proposal, only those viewers who are able to pay $1,000 per year for unregulated subscription television will have access to any television programming of any kind."

The House and Senate are currently considering reauthorization of SHVERA, the Satellite Home Viewer Extension and Reauthorization Act, because the distant signal license expires at the end of the year. As such it is considered must-pass legislation, though broadcasters argue it must not pass with a broad DMA revision.

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.