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'Tis the season to be jerked around

Tue, 01/03/2012 - 2:03pm
Brian Santo

To open the new year, Time Warner Cable once again has found itself in a nasty retransmission rights battle, this time with the MSG Network, which pulled its programming from the MSO's lineup.

For some of those working in the cable industry, the phrase "Happy Holidays" is merely an ugly reminder that it's retrans renegotiation season. There have been intermittent retrans blackouts threatened for a couple of months now, including apocalyptic ads designed to alarm MVPD subscribers that they're about to lose programming, mostly – but not all – affecting small and mid-size operators that have less negotiating leverage (and therefore perhaps the largest complaints).

Other MSOs, including Suddenlink and Mediacom, managed to cut deals with broadcast groups in order to keep steady feeds of broadcast channels, but their press releases announcing the deals had the brevity of people trying to catch their breath after dodging bullets.

TWC subs woke up on New Year's Day missing the MSG channels. TWC is claiming that MSG is demanding a 53 percent increase in payments; MSG stopped just short of calling the claim an outright lie – as if the phrase "patently untrue" has some shade of meaning other than "lying."

But, of course, neither is volunteering the actual numbers.

Which is part of the problem: These negotiations are conducted almost entirely in the dark, and the parties bind each other to not speak of them. MSOs say the retrans deals have them so bound to secrecy they've no ability to even explain to their subscribers why their rates have gone up.

The FCC is trying to craft a politically acceptable solution that offers some deregulatory red meat to right-wing Republicans and a very specific solution for operators that feel broadcasters are ganging up on them.

One of the problems disproportionately affecting smaller MVPDs is that broadcasters will gang together to eke out the most money for retrans fees. Previously, a small op unable to get a decent deal with one broadcast affiliate of a major network could turn to another. Not anymore, when local affiliates gang together and insist on joint negotiations.

The FCC notion is to relax the rules on media consolidation in exchange (in part) for protections for MVPDs in negotiating retrans contracts. The agency is seeking comment on the subject.

The small ops are encouraged. American Cable Association President Matt Polka said: "ACA is very pleased that the FCC has sought comment on the impact of separately owned, same-market broadcasters that coordinate their action in the retransmission consent market. In comments filed with the FCC, ACA has shown that coordinated negotiation of retransmission consent harms local competition and artificially increases retransmission consent fees, which consumers absorb in the form of higher rates. ACA commends the FCC for taking this important next step in the process, which we hope will lead to an outright prohibition of a practice that harms competition and consumers."

The ACA is also pushing the FCC to impose transparency requirements to prevent television station owners that coordinate their retrans consent negotiations from keeping the details secret.

The organization calls that coordination price-fixing. Which it is. Which shows how desperate the situation is. In Washington, you don't dare call something what it is unless you have nothing to lose.

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