Legislation passed today by the House Judiciary Committee lacks pay TV-backed retransmission consent reforms. The committee’s vote means that the legislation at issue — which would reauthorize the Satellite Television Extension and Localism Act, or STELA — has now gotten the nod of three of the key congressional committees with a say on the legislation.
Retrans Rev Seen Hitting $7.6B By 2019
According to SNL Kagan research, retrans revenue is also becoming a rapidly growing share of station group’s total revenue. Among the 18 groups covered in the research, the share ranged from 24% (Meredith) to 10% (Scripps) in 2013.
Wheeler ‘Concerned’ Over Online Blackouts
FCC Chairman Tom Wheeler tells Congress that broadcasters’ blocking pay TV subs access to online content during retrans negotiations concerns him. Wheeler did not tell lawmakers during the hearing what retrans blackouts had specifically raised his concerns, or what in particular he planned to do about it.
June 18 will mark the beginning of the FCC ban on top 4 stations in a market doing joint retrans negotiations, while legal challenges to the rule must be filed in court by July 18.
Block Communications, owner of TV stations, newspapers and cable systems says larger broadcasters and cable operators need to be reined in. It suggests the FCC increase its existing powers to ensure that broadcasters and pay TV operators negotiate retrans deals in good faith. Block also suggests that the FCC limit its intervention to retrans cases in which the pay TV operator serves fewer than 400,000 subs and the TV station group owns or operates at least 25 TV stations — or in which the pay TV operator serves more than 1.5 million subs and the broadcaster owns or operates five or fewer TV stations.
TVFreedom, a broadcast front group formed in response to the American Television Alliance, a cable and satellite front group, is leveraging consumer hatred of rising cable bills in a bid to derail the ongoing spat around broadcast retransmission fees.
Retrans fees paid by basic cable networks are still a fraction of overall network/programming carriage fees paid by cable networks. But those retrans fees are expected to rise quickly. SNL Kagan says broadcast fees amounted to 8.9% or $3.3 billion of the $37.3 billion in total revenue of cable operators pay basic cable networks and regional sports networks.
Hearst Television announced Wednesday that it has reached a retransmission consent agreement with Dish Network covering carriage of Hearst Television stations in the 25 Hearst Television markets. In a statement, the company said: “We appreciate the support and patience of our viewers, advertisers and local communities served by our stations. We regret the inconvenience they’ve experienced over the past several hours. We are pleased the interruption was brief and that our stations have been restored on Dish Network systems.”
Hearst Stations Blacked Out On Dish Network
More than two dozen network-affiliated Hearst Television stations went dark on the satcaster Tuesday night after the sides hit a wall in their retransmission talks. Dish Network’s carriage deal with Hearst TV expired March 1, but the parties had extended the deadline to last night at 10 p.m. ET. The blackout affects more than two dozen Hearst stations including ABC affil WCVB Boston (DMA 7), and outlets in top 25 markets Sacramento, Pittsburgh and Tampa.
Grace Koh, a House Energy and Commerce Committee staffer,says: “We have made it very clear in the House side that STELA [the Satellite Television Extension and Localism Act] is not the right place to address retransmission consent reform. This is not something we want to wade into lightly.”
Rep. Anna G. Eshoo, tells the American Cable Association’s annual Summit that cable retransmission consent payments to broadcasters ‘is serious money. Most frankly, I think it’s a racket” and says such fees and blackouts that come from their negotiotions constitute an “unsustainable business model.”
FCC Blocks Joint Retrans Negotiations
Two or more separately owned Top-4 broadcasters in the same market would be prohibited from negotiating retrans deals altogether.
In anticipation of tighter retransmission consent regulations, the Spanish-language station owner wants the FCC to allow it to keep on negotiating contracts for Entravision stations as well.
Lots Of Interest On FCC’s March 31 Agenda
The agenda is out, and the FCC’s likely action on its Quadrennial Review of the multiple ownership rules now seems to be much clearer. And the decision seems likely to follow the rumors circulating in Washington for weeks, with new regulatory wrinkles added to those previously suggested. Among the hot topics: JSAs, SSAs and retransmission consent agreements.
Subscribers of Cox Communications’ three cable systems in Connecticut could find themselves unable to watch ABC affiliate WTNH Hartford and its sister station, WCTX, on March 14 if a new retransmission agreement isn’t reached. The two stations are owned by LIN Media and have already begun running announcements about their possible removal from the Cox lineup.
Republican lawmakers reportedly agreed to delete a provision in the draft satellite bill that would have freed cable TV operators from their current legal obligation to carry retransmission consent stations on the basic tier.
Among the key provisions widely rumored to be under serious consideration for inclusion in a draft satellite TV bill that could be introduced in the House of Representatives as soon as today, is one that would free cable TV operators of their current legal obligation to carry retrans stations on the basic cable tiers that all cable TV subscribers are required to buy, sources say.
Time Warner Cable has announced that a 40% increase in retransmission consent fees is forcing the company to add “a new line item called the Broadcast TV fee” onto customer bills to “make customers more aware of these rising costs.”
Sinclair, Buckeye Fail To Strike Retrans Deal
The owner of Toledo, Ohio, NBC affiliate WNWO tells the cable operator’s subscribers the station is gone for the foreseeable future and encourages them to switch to Dish Network, DirecTV or AT&T U-verse.
The new retransmission consent contract CBS Corp. signed with Time Warner Cable last summer after a bitter fight could be a casualty of Comcast Corp.’s proposed acquisition of the pay-TV operator. According to people familiar with the deal, it does not include provisions protecting all the terms of the pact should Time Warner Cable be acquired by a distributor with a sweeter arrangement. These people requested anonymity because the agreement is confidential.
A promise to not fight retransmission consent tops the list of things broadcast TV operators want in exchange for not trying to derail the proposed $45 billion merger with Time Warner Cable.
“Nothing about this deal changes the way Comcast will deal with retransmission consent negotiations,” said a Comcast spokesperson. “Once the deal closes TWC will be part of Comcast and thus our practices will govern.”
The Hispanic Institute, Entravision Communications Corp., ZGS Communications and the Media Alliance are the latest members of the new coalition created in response to efforts by cable and satellite operators that want to restrict broadcasters’ retransmission consent efforts.
Convinced they are paying too much in retransmission consent fees, the cable and satellite industries are expected to make a big push in Congress and at the FCC this year to amend the retransmission consent rules to make it tougher for broadcasters to negotiate for fees. Here’s the case in numbers against changing the rules.
Congress Shouldn’t Carry Water For Pay TV
Fred Campbell, executive director of the Center for Boundless Innovation in Technology: “Pay-TV providers want to have it both ways. They want the ability to blackout channels they don’t think they need while asking Congress to prevent broadcasters from withholding their programming when video providers refuse to pay. Enhancing the power of pay-TV providers over programming in this way might improve their bottom line, but it wouldn’t benefit consumers. Congress should just say no.”
The new TVFreedom.org coalition says the pay-TV industry must be held accountable for continually increasing consumers’ monthly bills, saddling them with “extra fees” and artificially disrupting service through programming blackouts.
Under one of new wrinkles in the retrans reform campaign, pay-TV companies are now urging the FCC to crack down on the ability of broadcasters to offer more than one Big 4 TV network-affiliated signals over their own channels by multicasting, and to limit the ability of broadcasters to negotiate retransmission consent rights for unaffiliated stations in separate markets.
WFSB, Cablevision Settle Retrans Dispute
Meredith-owned CBS affiliate WFSB Hartford-New Haven, Conn., announced on its website and through social media that it hadsreached a deal with Cablevision to restore its programming to the cable provider’s Optimum TV service.
Buckeye Offers Credit During WNWO Blackout
Buckeye CableSystem will give its Toledo-area customers a small credit each month until the cable television company and Sinclair Broadcast Group agree on a new contract that allows Buckeye to resume carrying Sinclair’s NBC affiliate WNWO.
The Pittsburgh-based American Cable Association has been dogged in attacking joint sales and shared services agreements that some broadcasters use to operate more stations in a market than they may own under the FCC’s local ownership limits.
Retrans Reform Heats Up In Washington
With a new FCC chairman and a pledge to overhaul the Communications Act, TV stations’ growing revenue stream is under a microscope. Tired of broadcasters’ ever-increasing demands for retransmission consent payments, the pay TV distributors — cable and satellite operators — are determined to modify the law or FCC rules to handicap broadcasters in their retrans negotiations.
Its stations and those of Esteem Broadcasting are back on the satellite provider after being off since Dec. 8.
Richmond, Va.-based Media Genera yesterday reached a settlement with Charter Communications to renew their retransmission consent agreement. Both companies had agreed to extend the agreement, which was set to expire Dec. 31, until midnight on Thursday. The resolution prevented a disruption in service just before Media General’s stations were set to go dark.
It comes to terms with AT&T, Cable One and Cox Communications for stations in nine markets.
Cox And Charter Resolve Retrans Dispute
Charter Communications and Cox Media have reached retransmission consent agreements for four markets: Atlanta (WSB), Charlotte (WSOC), San Francisco (KTVU-KICU), and Seattle (KIRO).
KTEN, Cable One At Odds In Retrans Talks
Cable One’s retransmission consent agreement with KTEN (NBC), ABC Texoma and CW Texoma will expire at midnight Tuesday. Should an agreement not be reached by that time, those channels will be taken off the system. Both Cable One and KTEN have followed the traditional game plans, posting their side of the situation and asking subscribers to call the other entity.
As Dec. 31 nears, the noise over potential blackouts gets a bit louder. Here’s a rundown of some of the retransmission consent deals that still need to be settled.
Morgan Murphy Sets Retrans Deals With TWC
“With these agreements and cable partnerships our stations will continue to serve our viewers with the best news and entertainment programming in our markets,” said the group’s CEO Elizabeth Murphy Burns.
KECI GM Offers His Side Of Carriage Dispute
KECI Missoula, Mont., GM Richard Reingold: “Since late Saturday, Dec. 7, KECI-TV NBC Montana has been missing from Dish Network’s satellite TV service. Dish customers are angry and want to know what happened. I welcome this opportunity to explain.”