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Senate Gets Retrans Earful Before Hearing

While the Senate Communications Subcommittee was
preparing to hear from executives at Cablevision, Time Warner Cable, News
Corp., Univision and Ovation about the retransmission consent process in a
hearing Wednesday afternoon, plenty of others were weighing in beforehand with
their own informal testimony.

In a letter to Subcommittee Chairman John
Kerry (D-Mass.), American Cable Association President Matt Polka said he shared
Kerry's view that the regulatory regime is broken and does not protect
consumers. Kerry has introduced legislation to reform the system and give the
FCC more power to intervene if necessary. "All available evidence suggests
the current regulatory structure results in significantly higher retransmission
consent fees, generating higher costs for consumers and hindering our efforts
to deploy broadband and other programming options," said Polka.

ACA is pushing a petition to the FCC to
reform the system along similar lines to Kerry's bill, and gave the senator a
shout-out for his support for FCC action on the petition.

Free Press said it was glad the subcommittee was
looking to prevent "blackouts" during future retrans fights.
"The fact is, when companies disagree over carriage fees and pull
channels, it is consumers who are caught in the middle, while they fight over
our money," said Free Press political advisor Joel Kelsey, who
put in a plug for transparency and a la carte. "Programmers should get
fair market value for their programming, but it's impossible to know what the
market will bear when all the prices are secret. We need to ensure the process
of negotiating carriage fees is transparent, and that the revenue generated
through these fees by reaching into subscribers' pockets is providing some
benefit," he said. "Ultimately, consumers should know what they are
paying for each channel, and should have the option to choose to pay for only
the channels they want."

Not represented at the hearing was the Organization
for the Promotion and Advancement of Small Telecommunications Companies
(OPASTCO), but that did not stop them from calling on the subcommittee and
the FCC to reform retrans, saying it was important for boosting broadband

That hits right in the FCC's sweet spot given the
importance of its National Broadband Plan.

"Retransmission consent reform is equally vital to
both enhancing consumer choice in the video market, and to encouraging
broadband adoption," OPASTCO President John Rose said in a statement in
advance of the hearing.

He said that rural carriers that can deliver
video--like TV station signals--alongside their broadband offerings have 24%
higher subscription rates than those offering stand-alone broadband.

Rose praised the congressional inquiry into
retrans, but told the FCC not to wait around. "While Congress continues to
examine this issue, we call upon the Federal Communications Commission to use
its statutory authority to reform the current rules without further delay,"
he said.

The FCC itself has recognized the value of TV
service in driving broadband adoption, though it has been focusing not on the
value of TV stations but of TV sets. The commission is currently consideringwhether and how to create a universal gateway device--one ring to unite them
all, as it were--that can bring together traditional multichannel video
with broadcast TV and broadband services through the TV, given that while only
about 75%-80% of homes have computers, more like 99% have a TV set.

Also weighing in from the sidelines is ivi
TV, the over-the-top video provider that is streaming station signals without
having negotiated retrans payments (broadcasters, including Fox, arebattling the company in court).
"Consumers should not be used as pawns any longer in big media's chess
game over control of the public airwaves. Instead of fewer options and higher
fees," said ivi TV CEO Todd Weaver in a statement, "[T]hey should
have more control over their own entertainment options, which is possible with
innovations like ivi TV."

Ivi pitched Cablevision on the idea of paying
for ivi subscriptions
($4.99 per month) for its cable subs during
the retrans impasse so viewers could access Fox content.
Cablevision said at the time it was unaware of the pitch.

An ivi TV spokesman said the company got a
320% boost in subscriptions in the New York market anyway. Fox stations were
off Cablevision systems in New York and Philadelphia.

Weaver also put in a plug for a la carte. "A
subscriber should be able to opt-in or opt-out of paying for individual
channels," he said. "Doing so would allow any per channel price be
made transparent, and give consumer choice..."

Fox briefly blocked Cablevision subs' access to its content online
via Hulu and Fox Web sites, but reinstated it since not
all Cablevision broadband subs are also video subscribers, according to a