The argument between Cablevision and ABC Disney over the amount of retransmission fees the latter wants to pull out of the former is becoming a political issue.
Sen. John Kerry (D-Mass.) has advised the Federal Communications Commission that he thinks that a programmer should not be able to pull its signals unless the service provider is acting in bad faith. He’s suggesting the FCC revisit retransmission rules. Rep. Joe Barton (R-Texas), meanwhile, has advised the Commission that the government should keep out of it.
Disney is trying to get Cablevision to pay for a signal that everyone could get over the air for free. If Disney gets what it wants, that would raise Cablevision’s payments to Disney by 20 percent, from $200 million to $240 million. Disney is threatening to pull its signal this weekend.
Cablevision is siding with the senator. “We believe Sen. Kerry is correct and ABC Disney should not pull the plug and should work with us in good faith to reach an agreement that is fair for Cablevision customers. … ABC Disney should not put viewers in the middle and instead work with us to reach an agreement.”
Programmers have been agitating for higher retrans fees. ABC Disney has always been one of the most aggressive companies when it comes to pricing its content and leveraging its market power to get the pricing it wants. Its ESPN unit is famous for being one of the most expensive channels to carry, and for compelling service providers to broadcast multiple additional channels they don’t necessarily want in order to get ESPN.
The American Cable Association threw in behind Cablevision.The ACA and its members have been having their own retrans struggles, and given their smaller size, have even less leverage than Cablevision and have been complaining to the FCC about it for some time.
ACA President and CEO Matthew Polka issued the following statement: “ACA agrees with Sen. Kerry that there must be some limit to the broadcasters’ right to pull their signals from customers of cable and satellite operators during retransmission consent negotiations. It’s deplorable, but hardly surprising to small cable operators, that the Walt Disney Co. would engage in such an extreme tactic as pulling its ABC signal from 3.1 million Cablevision Systems Corp. customers on the eve of a major television event like the Oscars, simply to extract more cash from cable customers boxed in by a broken retransmission consent regime.
“ACA applauds Sen. Kerry for his leadership in urging the Federal Communications Commission to revise the retransmission consent rules, which unfairly allow broadcasters to demand much higher fees from smaller cable operators than larger ones in the same market, and then pull their signals when those unreasonable demands aren’t met.”