Retrans Ruminations For Your Weekend

Well, another week has gone by, and FCC Chairman Julius Genachowski has yet to step into the middle of the bitter Fox-Cablevision retrans feud. That means he gets to keep the TVNewsCheck Public Servant of the Year Award, which I presented to him last week for his “respectful neutrality.” [Editor’s note: The day after this article was posted, Fox and Cablevision settled the dispute.]

At the B&C Hall of Fame dinner this week, a broadcast partisan suggested that the real reason the chairman doesn’t want to get involved in Fox-Cablevision is because of the awful precedent it would set. If the FCC gets into the business of regulating retrans negotiations, he said, it will never get out. But, as I suggested last week, I think there’s way more to it than that. By resisting the urge to fix things, Genachowski is recognizing that retrans is good law and that private marketplace negotiations will eventually bring us to a fair price for broadcast signals on cable and satellite.

Genachowski’s stance, by the way, should quiet the talk that he is hell bent on destroying TV broadcasting, even if he does covet TV spectrum for wireless broadband. If he wanted to harm it, what better way than to take cable’s side and choke off retrans dollars?

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Some other thoughts on the Grant Retransmission Consent Standoff of 2010:

Cablevision seems to have lost its mind with some of its tactics. First, according to the New York Daily News, a Cablevision rep was caught advising a customer to go to websites of, how shall we say, dubious legality to watch the World Series and Glee. That prompted a cease-and-desist letter from Fox. Later, Cablevision suggested that the government or some nonprofit could stream the Fox broadcast of the World Series for free, citing some obscure provision of the Copyright Act.

What a bizarre place for Cablevision and the controlling Dolan family to be. They own three major sports franchises, AMC and other cable network. Do they really want to be in the business of steering people to places on the Web that don’t bother to pay copyright holders and of searching out loopholes in the copyright laws? I would think that such talk also undermines Cablevision’s standing in Washington, where respect for the law still matters.

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It’s funny that neither side is spending more time encouraging consumers to put up antennas to get the World Series and everything else Fox has to offer off air. My guess is antennas don’t serve the interest of either party.

Fox really doesn’t want people watching its channels for free. It wants people to watch them on cable or satellite so it can get paid for their programming. Cablevision, on the other hand, may fear that if subscribers ever discover they can actually get all the most-watched TV channels off air for free, with superior HD quality, they may never return.

If you want to know about the antenna solution, the best place to go on the Web is the FCC.

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Of all the argument that Cablevision has made in the dispute so far, the one that gets me the most is this one: “News Corp is demanding more in fees for Fox 5 and My9 than Cablevision and our customers pay for all of the other broadcast stations combined!”

My answer is that Cablevision should be ashamed of itself for paying so little to all those other stations. I hope that when all of this is over, Cablevision will reopen negotiations with CBS, ABC and NBC and make sure they get the same money as Fox. Fair is fair.

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As I said last week, every broadcaster should be backing Fox in its attempt to wrest higher retrans fees from Cablevision since it would set a higher benchmark for them and demonstrate that broadcasters can win the surrounding PR and policy battles. But Fox affiliates might be feeling a little queasy about it. Fox’s hard line shows the driving determination to get paid for its programming. Right now, Cablevision is facing the full force of that resolve. Later, it will be affiliates as they try to hang on to their own retrans dollars when affiliation renewals contracts come up.

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At least all the bickering is helping the New York newspapers. The Star-Ledger here in Northern New Jersey is doing a fine business running full page ads not only with the back and forth between Cablevision and Fox, but also from FiOS, which is trying to poach uphappy Cablevision subscribers.

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Besides the expected bashing broadcasters face during blackouts, they should be aware of another sort of retrans backlash — against duopolies. As reported by Kim McAvoy last June, the American Cable Association, which represents smaller cable operators, has begun a campaign challenging the whole notion of allowing one broadcasters to operate two stations.

This week, things got more interesting when Time Warner Cable cited retrans concerns in asking the FCC to block the duopolies that LIN Media is trying to put together in Dayton, Ohio, and Green Bay-Appleton, Wis., through the purchase of two CW affiliates from Acme Communications.

To get around the duopoly restrictions in Dayton, LIN is acquiring WBDT through a front, Vaughan Media, so that it can pair it up with its NBC affiliate in the market, WDTN. In Green Bay, LIN is asking for a “failed station” waiver so that it can acquire and operate WIWB in tandem with its Fox affiliate, WLUK.

Time Warner alleges that the deals give LIN “undue power” in retrans negotiations and harm consumers “as collusive negotiations drive up prices and increase the risk of service disruption.” Time Warner also argues that allowing the stations to negotiate retrans jointly would violate the antitrust law, hinting that if the FCC doesn’t act, Time Warner may see LIN in court.

I’ve got a feeling that we are going to be seeing more of these petitions from cable, especially in cases where the virtual duopolies involve two Big Four affiliates getting together.

Harry A. Jessell is editor of TVNewsCheck. You can reach him at [email protected] or 973-701-1067.