JESSELL AT LARGE

Happy 20th Birthday To Retrans Consent

It’s fitting that Dispatch Broadcast Group’s settlement of a carriage dispute with Dish Network came when it did, for today marks 20 years since the passage of the Cable Television Consumer Protection and Competition Act, the measure that created retransmission consent and a second revenue stream that is now critical to local television.

Last night, Dispatch Broadcast, owner of two of the finest TV stations in the country — WBNS Columbus, Ohio, and WTHR Indianapolis — settled its four-week-old retransmission consent dispute with Dish, restoring service to subscribers of the satellite operator in the two markets and the flow of retrans dollars to Dispatch.

The broadcaster may not have gotten all that it wanted, but it probably renewed at a higher rate than it had before. (Parties to retrans deals rarely talk numbers.)

The deal is just one of thousands struck between broadcasters and cable and satellite operators over the years. It’s newsworthy only because it involved a lengthy service disruption.

Retrans is now solidly embedded in broadcasting business, and, for Dispatch and every other station owner, it has been a unqualified boon. It is providing the dual revenue stream — advertising and programming fees — that has allowed broadcasters to keep pace with cable in acquiring sports and other expensive programming.

Without it, broadcasting’s future would be bleak. With it, that future is bright.

So, it’s fitting that we take a moment this afternoon to celebrate the 20th anniversary of retrans.

BRAND CONNECTIONS

On Oct. 5, 1992, Congress overrode a presidential veto and adopted the Cable Television Consumer Protection and Competition Act. It was a stunning setback for cable, and an extraordinary triumph for broadcasters.

It was NAB’s finest hour. Under the leadership of then-President Eddie Fritts, it cooked up retrans and it guided it through an extraordinary legislation process. As I recall, the veto override was the only one of the Bush I administration. CBS also deserves great credit for its forceful and effective advocacy.

NAB was helped by cable’s all-or-nothing strategy. Cable never serioulsy negotiated provisions of the bill, relying solely on the promised veto. Had it negotiated, it might have been able to mitigate broadcasters’ retrans rights.

Cable rate regulation drove passage of the bill, but retrans — the requirement that cable operators get permission from stations before carrying their signal — was, in retrospect, the critical component. (Retrans was extended to satellite in subsequent legislation.)

That meant that TV stations could ask for something in return for that consent — like money.

The money was a long time coming. For the first 13 years, cable bluffed broadcasters, refusing to pay a nickel (literally on a per sub, per month basis).

Instead, they would make commitments to buy advertising on the stations or, in the case of stations owned by the networks, agree to carry their new cable channels.

Talk about unintended consequences. Cable use a law aimed at strengthening local broadcasting to encourage new cable networks that weakened local broadcasting.

Broadcasters who vowed to take nothing but cash quickly caved. The prospect of being off the cable grid was too frightening.

Then, in 2005, things began to change. Nexstar’s Perry Sook and others began demanding cash and they got it.

Another provision of the 1992 act prohibited vertically integrated cable companies from denying programming distribution deals to satellite operators and overbuilders. This was significant, too. It helped get satellite TV operators off the ground and make them formidable cable competitors. As such, they provided valuable retrans leverage for broadcasters. Cable operators who took a hard line with broadcasters risked losing subscribers to satellite.

Coincidentally, the FCC today was expected to sunset the so-called program access provision. No matter for broadcasters. With millions of subscribers, Dish and DirecTV can stand on their own.

As I’ve pointed out here many times before, broadcasters are not getting their fair share of the $30 billion that cable and satellite dole out to cable networks each year. But that’s beginning to change, too. Every time a deal is renewed, the broadcasters’ take gets a bit bigger. It’s a powerful trend that should continue.

The only flaw in retrans is that it is proxy for copyright. It is not copyright. That means that broadcasters cannot make deals for streaming their signals on the Internet and, through the Internet, to mobile phones. This is unfortunate. That’s a big part of the future.

But let’s not spoil the occasion. We should simply celebrate the 20th birthday of the Cable Television Consumer Protection and Competition Act and those men and women of 1992 — broadcast lobbyists and lawyers — who convinced Congress to make it reality.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.


Comments (0)

Leave a Reply


More News