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TWC’s Britt ‘It’s not a free market’

Mon, 09/09/2013 - 12:59pm
Mike Robuck

With today marking the one-week anniversary of CBS and Time Warner Cable ending their month-long stare down over retransmission fees, and with another dustup looming between Disney/ESPN and Dish Network, Time Warner Cable CEO and Chairman Glenn Britt has some advice for pundits covering programming fee dustups: Go read the Cable Television Consumer Protection and Competition Act of 1992.

“I think that we have an industry structure in the television part that is not a free market,” Britt said in a recent interview with CED. “ It was totally determined by the ‘92 legislation. I mention that because I think there are very few commentators or analysts who bother to go back and look at that history.

britt

“If you’re 35 years old you say ‘Gee, 20 years ago I was 15 and that’s ancient history,’ but it’s relevant to what’s going on. That structure is ultimately not working for the public because you have cost prices going up much faster than inflation. People say ‘Oh it’s a free market negotiation,’ but if you go through the history there’s nothing about any of this being free market.”

The 1992 Cable Act said, in part, that cable operators were required to carry most local broadcast channels and that cable operators were prohibited from charging local broadcasters to carry their signals. Cable operators have long maintained that they shouldn’t have to pay for channels that were free over-the-air while networks have argued that their programming and costs merit compensation.

Of course, all of this was hashed out before over-the-top video providers, second-screen devices and TV Everywhere services were even a glimmer in anyone’s eye. There have been numerous calls for Congress and the Federal Communications Commission to update the 1992 Cable Act, and the Telecommunications Act of 1996, but so far there hasn’t been a consensus on what sort of reforms are needed

On the other side of the coin, Time Warner Cable reportedly charges $4 a month for coverage of the Los Angeles Lakers on TWC Sportsnet and TWC Deportes while Comcast has programming DNA through a host of NBC-based channels, regional sports networks, international channels and news offerings.

During the negotiations over retransmission fees between CBS and Time Warner Cable—a battle of the “eye” brands—CBS brought up the lawsuit that had been filed against Time Warner Cable on June 18 in California Superior Court in regards to charging for Lakers’ games, which formerly were free.

To counter CBS’s blackouts in New York, Los Angeles, and Dallas-Ft. Worth, Time Warner Cable handed out free antennas for over-the-air viewing in the affected areas. 

With ESPN and Dish next up in retransmission boxing ring, there will be more posturing by both sides over broadcast fees and sports tier costs, and viewers could end up missing shows they want to watch during the negotiations, or paying for channels they have no interest in watching once the deals are completed.

Retransmission agreements are a case of history needlessly repeating itself with, as many have pointed out, consumers bearing the brunt of the conflicting agendas. 

 “It may, at this moment in time, be working for the content companies but I would suggest it won’t ultimately,” said Britt, who is stepping down as the leader of Time Warner Cable at year’s end. “I do think all of this needs to be updated, but if it isn’t, if you were a distributor and programming costs were going up much faster than revenues, really, if that continues that will be a much less important part of our offerings in the future compared to broadband and B2B.

“That’s where it is today, but whether it has to turn out that way, I don’t know.”

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