Cable Seeks Signal Substitution In Retrans

Broadcast TV’s competitors will urge Congress Tuesday to revise retransmission consent law to permit cable and satellite TV companies to use distant network signals during retransmission consent negotiations.

“Without immediate action by Congress … it seems likely that millions more screens will go dark every year, and consumers will pay more and more for their cable and satellite service,” R. Stanton Dodge, EVP and general counsel of Dish Network, will testify during a hearing before a House Judiciary Committee subcommittee, according to an advance copy of his written testimony.

“While CenturyLink believes that content owners should be reasonably compensated for their content, under the current law, retransmission consent fees are providing windfall profits for the major broadcast networks and owners of multiple broadcast stations rather than a safety net for local stations,” James Campbell, CenturyLink regional VP, public policy, will testify. He also will make clear that his company wants the right to carry distant network programming during retransmission consent bargaining.

“Consumers should not be punished as a result of provider negotiations,” Campbell says in the written text of his testimony.

But the National Association of Broadcasters will urge lawmakers to veto the pleas for relief. “A change in the law that would permit a satellite carrier to import a distant signal — not based on need, but to gain unfair market leverage in a retransmission consent dispute — would be contrary to decades of congressional policy aimed to promote localism,” Gerard Waldron, a communications attorney who is testifying in NAB’s behalf, will say, according to the text of his written testimony for the hearing.

Allowing the importation of network signals also would jeopardize the “viability of the local network-affiliated stations,” Waldron will also add.

Among other arguments, Waldron will contend that viewers are far more likely to lose access to TV programming from power outages than from retransmission consent bargaining impasses. In addition, he will charge that that 89% of the recent “service disruptions” resulting from negotiating impasses have involved three companies — Time Warner Cable, DirecTV and Dish.

“Broadcasters have never been found by the FCC to be in violation of their obligation to negotiate in good faith,” Waldron will add, according to his testimony.

Also during the hearing, the American Cable Association will testify in favor of a “standstill” arrangement that would allow cable operators to continue to carry a broadcaster’s programming — under the terms of the elapsed agreement — during retrans consent negotiations. Earle MacKenzie, EVP-COO of Shenandoah Telecommunications — the ACA board member who is slated to present the association’s case at the hearing — will say that the terms for a new deal would be applied retroactively, with the negotiations ultimately subject to binding arbitration when necessary.

Broadcast industry competitors are making their pitches for relief as Congress considers yet another extension of the Satellite Television Extension and Localism Act, which gives satellite companies copyright clearance to retransmit distant TV signals. STELA, as the act is known, has emerged as a prime industry target for retransmission consent reform.

On a related note, Rep. Anna Eshoo, D-Calif., on Monday released draft legislation that would give the FCC authority to “grant interim carriage of a television broadcast station during a retransmission consent negotiation,” according to a press release issued by the congresswoman’s office.

The legislation — the Video CHOICE Act — according to the news release, also would prohibit a TV station “engaged in a retransmission consent negotiation from making their owned or affiliated cable programming a condition for receiving broadcast programming.” In addition, the legislation would allow consumers to buy cable TV service without subscribing to retransmission consent TV stations.

“Recurring TV blackouts … have made it abundantly clear that the FCC needs explicit statutory authority to intervene when retransmission disputes break down” said Eshoo, ranking Democrat on the House Communications and Technology Subcommittee, which has also slated hearings on the TV industry for Wednesday.

NAB President-CEO Gordon Smith said his association opposes the Eshoo bill, which he alleged had a “pro-pay TV slant” and could “embolden pay-TV giants to continue to game the system rather than negotiate in the free market for programming most valuable to viewers.”

Parents Television Council President Tim Winter said: “We applaud Congresswoman Eshoo’s efforts to change current regulations that are being used to stifle competition and consumer choice. The stranglehold that programmers have over distributers and, more importantly, the stranglehold they have over consumers, urgently needs to be broken. This bill would help pave the way for more options in the marketplace.”