A digital-TV-oversight hearing in the House Tuesday became the site of a tussle over retransmission-consent negotiations.
In fact, National Cable & Telecommunications Association president Kyle McSlarrow used his time on the witness stand to focus entirely on the issue, calling it "a coming storm."
The issue was tied into the DTV transition by the so-called quiet period that was proposed -- a moratorium on broadcasters pulling their signals from cable systems over stalled retransmission-consent negotiations around the time of the Feb. 17, 2009, transition to avoid confusing viewers who have been told that they could lose signals due to the DTV switch.
Cable operators asked the Federal Communications Commission for a several-month moratorium beginning in January 2009 and extending through the end of May, while the National Association of Broadcasters countered that it would support a much briefer respite (Feb. 4-March 4, or essentially two weeks on either side of the Feb. 17 transition).
McSlarrow told the committee that historically, the retransmission-consent playing field has been relatively level in most cases, although never a free-market negotiation. But he said that in the current economy, with economic pressures on broadcasters from private-equity owners and "hedge funds looking for a quick buck," there are some broadcasters who want to ratchet up their prices, some by 500%.
McSlarrow had an ally in Rep. Anna Eshoo (D-Calif.), who suggested at the hearing that the quiet period should start before the end of the year and extend through a "reasonable time" after the transition.
Eshoo said there was a "significant risk that more than a few stations could go dark in advance of the digital transition." She added that it will be a confusing enough time without that potential additional confusion, pointing out that January was National Football League playoff time and there would be a “revolution” if stations went dark then, although that has always been a possibility with or without a digital switch.
National Association of Broadcasters president David Rehr, seated next to McSlarrow at the witness table, said checks and balances remain on the negotiations, adding that he could count the number of problems in those negotiations on fewer than 10 fingers and that the FCC has never found a broadcaster not to have bargained in good faith. But he also reiterated the NAB board's support for the one-month quiet period.
McSlarrow countered that the problem was not good faith but the bad structure of the negotiating process that allowed for "exorbitant cash demands" that will change the historic balance of the negotiations, with cable operators left with the choice of either passing those costs on to subscribers or insisting on "something lower."
FCC chairman Kevin Martin, who was also a witness at the hearing, said he proposed a slightly longer quiet period than the NAB's -- three weeks before and after. Eshoo asked Martin to let Congress know as soon as the FCC decided what to do, saying that the period should “start sooner and stretch out later.”
