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Ovation Chief Says Retrans System Threatens Indie Nets

Charlie Segars, chairman of independent arts cable
net Ovation, says his channel has been successful in gaining carriage,
including from the largest carriers--Comcast, Time Warner Cable, DirecTV, DISH--and
that he has gotten a fair price for his content, but that doesn't mean he does
not have major concerns about the current content negotiation process when TV
station signals are in the mix.

Segars plans to tell a Senate panel just that
according to his written testimony for a Senate Communications Subcommittee
hearing Wednesday on the retransmission consent regime, where he is weighing in
on the side of retrans critics.

So, if he has "earned" carriage and
cable operators are not refusing to give him fair value for his signal, what is
his beef with the carriage negotiation process? He sees independents like his
own network being a potential casualty of rising TV station prices.

The problem, he says, according to a copy of his
prepared testimony, is that TV station operators are trying to get paid twice,
once through cash for their TV station signals, and again through fee increases
for the co-owned cable channels they were able to launch and grow through the
retransmission consent system.

Cable operators, who he said believe they were
forced to carry and pay for networks they did not want--in order to get the TV
station signals they did want--now must also pay for those "free"
over-the-air signals, "at a cost that adversely affects their ability
to affordably provide TV to their subscribers."

That last part is the key to his criticism as far
as the fate of his own network is concerned. He said the "last remaining
independents" are caught between the powerful distributors and
well-operated, vertically integrated media companies.

"With retransmission fees likely to top 1.3
billion dollars by 2012, distributors will have to look to their customers to
make up some of the difference," he says. "And they will have to
aggressively cut programming costs too. Independent networks, with no service
bundling advantage through retransmission, and little leverage, despite
delivering under-served categories like the Arts, will be targeted."

Segars argues that if broadcasters get to use the public airwaves
to earn "extra payment for historically free TV service," then
they should be allowed to bundle other programming in those deals, and if there
is going to be outside arbitration, he wants it to include not just TV stations
but independent cable nets.