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."
Rep. Eshoo Calls Retrans Fees ‘A Racket’
U.S. Rep. Anna G. Eshoo (D-Calif.), a vocal advocate in Congress regarding the need to reform the FCC’s retransmission consent rules, yesterday called the fees demanded of cable and satellite operators by TV broadcasters to carry their signals “a racket.”
Her remarks drew applause from the audience of independent cable operators gathered in Washington for the American Cable Association’s 21st annual Summit. (Her remarks were reported by ACA.)
Eshoo, the most senior Democrat on the House Energy & Commerce Committee’s Subcommittee on Communications and Technology, said that one company confided that it had just concluded its retransmission consent negotiations at a cost of $800 million, and that it expects those costs to increase to $1 billion in the next round.
“This is serious money. Most frankly, I think it’s a racket,” Eshoo said in a question-and-answer session with ACA Chairwoman Colleen Abdoulah, who is chairwoman of WOW! Internet, Cable and Phone.
Eshoo went on to call the ever-escalating fees and blackouts that result during these negotiations an “unsustainable business model.”
She added, “Small businesses can’t absorb these costs. They will have to pass these costs on to the consumer. The consumer is really screwed and tattooed,” she added. “What put me over the top on the blackouts was when they withheld [online] content. I said to my staff, ‘Enough.’ ”
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In response, Rep. Eshoo and Rep. Zoe Lofgren (D-Calif.), who serves on the House Judiciary Committee, introduced last December the Video CHOICE Act (H.R. 3719), which would authorize the FCC to respond to TV station signal blackouts waged against multichannel video programming distributors (MVPDs) and allow consumers to buy cable programming services without subscribing to the service tier that includes only TV stations electing retransmission consent.
If adopted into law, the bill would provide relief to consumers harmed by the retrans rules. Eshoo had hoped to get similar provisions included in the House version of the Satellite Television Extension and Localism Act (STELA).
“I tried like hell to get it into STELA,” Eshoo said, adding that the committee chairman thought the issue belonged in a re-write of the Telecommunications Act of 1996. “I’m not giving up on this,” she added. “Hopefully, the Senate will consider this in its reauthorization of STELA.”
Comments (5)
Mike Anderson says:
April 3, 2014 at 3:45 pm
Wonder if she will be in favor of the Comcast/ Time Warner merger? Answer, yes. she is not an idiot, so she must be in the pocket of cable companies, otherwise why would she not point out that mostly every cable channel in existence has gotten retransmission fees for many years, longer than broadcasters. Average broadcaster retrans rate is around a buck, ESPN is $5.00. Why doesn’t she address this? Oh, shes too busy attending cable sponsored luncheons. Whats her next job if she loses an election? Yes, lobbyist for cable companies
Kristjan Magnusson says:
April 3, 2014 at 3:51 pm
Without retrans, how will she handle complaints from her constituents when the Super Bowl, Final 4, and Olympics are on cable channels and can not be seen by many in the voting public?
Jamey Deen says:
April 3, 2014 at 5:02 pm
“The consumer is really screwed and tattooed” Really. How articulate. Cable, to most consumers, is an optional expense. Thus, the screwing and tattooing is limited to those who choose to subscribe. Members of the U.S. Congress like Ms. Eshoo are paid a LIFETIME pension with LIFETIME benefits for serving just one term of office. In this instance, the screwing and tattooing is universal – every American pays!
Andrea Rader says:
April 3, 2014 at 5:29 pm
If you want to talk about an unsustainable business model, how about making customers pay for hundreds of channels they don’t watch instead of the few they do? That’s what I call a “racket!”
Ellen Samrock says:
April 3, 2014 at 8:09 pm
Eshoo’s constituents are the high dollar hipsters of Silicon Valley. Broadcasters need not apply. Any “screwing and tattooing” as this member of Congress so eloquently put it, is coming from her and her muddle-headed notion of fairness in economics and the cable nets. She ideally would like all the MVPDs to get ‘money for nothing’ as they pay little to nothing for retransmitting broadcast content (and no blackouts under any conditions save the end of the world). While the cable nets, like ESPN as reality pointed out, grind away inflating their fees for content only a select few watch. Eshoo whines about a station group charging 800 million in retrans fees when her fellow congress folk spend more then that every hour. If anything can be called “a racket,” it’s a tax and spend Congress of which she’s deeply embedded.