American Cable Association CEO Matt Polka's recent column on retransmission consent (“No Subsidies for Free TV,” Jan. 15, 2007, page 21) contained numerous inaccuracies that should be addressed.
Broadcast programming offered by local TV stations and their network partners provides the backbone of every programming package sold by cable. That is why in 1992, Congress wisely corrected an imbalance that had permitted cable operators to take a local TV-station signal and profit from its highly valued programming without even providing stations the opportunity to negotiate for something in return.
By ACA's own admission, “An essential component of cable service is the retransmission of broadcast television station signals. Retransmission brings networks such as ABC, CBS, Fox and NBC to small-town and rural viewers; it also delivers local programming (such as newscasts) created at the station.” Those words — printed on page one of a January 2006 ACA study on retransmission consent — demonstrate convincingly the value of broadcast signals.
The FCC is in agreement. In its most recent review of the current state of retransmission consent, it noted that “as a general rule, the local broadcaster and the multichannel video program distributor (MVPD) negotiate in the context of a level playing field.”
This finding is consistent with Congress's intent that retransmission-consent negotiations “establish a marketplace for the disposition of the rights to retransmit broadcast signals,” but that government not “dictate the outcome.” It is clear from Polka's column that ACA is dissatisfied with the marketplace and is now asking government to pick a side — the cable side.
Recall that when a station opts for retransmission consent instead of must-carry, it gives up its right to assured carriage and channel position. The broadcaster, like the cable operator, comes to the table assured of nothing, to participate in a carefully balanced, reasonable negotiating process.
Local broadcasters provide the highest-rated, most compelling content offered to cable customers. In an era of fragmented audiences and exploding television choice, cable subscribers still devote about half their viewing time to programming offered by broadcasters. Indeed, during the 2005-2006 TV season, the 235 top-rated programs on ad-supported television were shows offered by broadcast networks.
Broadcasters collectively spend billions each year obtaining and producing the most-watched news, entertainment and sports programming. Programs such as 24, Lost, The Office, CSI: Crime Scene Investigation and the Super Bowl are extraordinarily expensive. Unfortunately, while local stations deliver this programming in digital high definition — the most pristine picture quality — cable operators routinely degrade that signal into a standard definition digital or analog picture.
Moreover, cable's refusal to compensate broadcasters for our high-value programming stands in stark contrast to its competitors. DirecTV and Dish Network routinely pay modest compensation to broadcasters. The same is true for a number of telephone companies now offering video services.
These MVPDs' compensation to broadcasters has not proved an excessive burden. Indeed, both DirecTV and Dish continue to add millions of customers each year while the fledgling telco services continue to grow.
For the last 15 years, the evidence demonstrates convincingly that retransmission consent has succeeded as Congress intended. Given that ACA already acknowledged that local TV signals are “an essential component” of cable, it would be worth considering the number of subscribers who would switch to satellite if they did not receive local broadcast channels as part of their cable package.
