Summer Retransmission Dispute Heats Up
By Deborah Collier
WasteWatcher, August 2013
In the midst of the summer doldrums, a broadcaster and a multi-channel video programming distributor (MVPD) are battling over retransmission fees with consumers suffering the consequences. The parties this time are CBS and Time Warner Cable (TWC), with millions of viewers across the country losing access to shows such as “NCIS,” “The Big Bang Theory,” and “Under the Dome.”
According to a July 19, 2013 Washington Post article, CBS warned viewers in New York, Los Angeles and Dallas they may lose programming if a deal was not reached with TWC. On August 3, 2013, CBS broadcasts were blacked out for millions of TWC customers across the country, particularly in these major markets.
The current dispute between TWC and CBS Broadcasting is a result of the outdated rules of retransmission consent, and it is not an isolated incident. As previously reported by CAGW, in October 2010, more than three million Cablevision customers in the New York area experienced a 16-day blackout of Fox programming, which prevented them from watching the first two games of the World Series. In March 2010, those same customers lost their ABC station right before the Oscars. Viewers missed the first 15 minutes of the awards show before Cablevision reached a deal with Disney.
In May 2012, subscribers in North Dakota were unable to access their local CBS and NBC programming when disagreements occurred during negotiations between Dish Network and Hoak Media Corporation. In another retransmission consent dispute, Midcontinent Communications subscribers in Minnesota and North Dakota temporarily lost access to local Fox stations in April 2012. As noted by Variety’s TV columnist Brian Lowry when reporting on the TWC-CBS dispute, “…don’t be surprised if this latest let’s-see-who-blinks-first-skirmish is just the first of several bigger battles to come, leaving consumers caught in the middle. In fact, it might just be a preview of coming attractions.”
Retransmission disputes are becoming par for the course as contracts come up for renegotiations. During a July 24, 2012 hearing before the Senate Commerce Committee, TWC Executive Vice President and Chief Video and Content Officer Melinda Witnmer testified that the number of blackouts that have occurred during retransmission negotiations has increased, rising from 12 in 2010, to 51 in 2011, to 69 in 2012. The rules set up by the Cable Act of 1992 require that cable operators provide broadcast services either through “must carry” provisions of the law, or through retransmission negotiations in which broadcasting fees are set by the broadcaster. But the law does not adequately address programming blackouts experienced by millions of consumers falling victim to tense negotiations between broadcasters and MVPDs.
During the 112th Congress, the Next Generation Television Marketplace Act (H.R. 3674/S. 2008) was introduced to repeal provisions of the 1992 Cable Act, which require MVPDs to set aside portions of their channel capacity for mandatory carriage of local commercial broadcast stations, and direct the Federal Communications Commission to repeal network non-duplication, along with other burdensome regulations, including syndicated exclusivity and sports blackout rules. The legislation would have repealed media ownership caps, which limit the number of broadcast stations a single company can own in a given media market, and lifted the ban on broadcasters owning a newspaper in the same market. Additionally, the bill would have repealed the compulsory copyright license, in which the government dictates the royalties MVPDs pay to broadcasters for their content, instead of allowing these royalties to be determined by a free market.
These reoccurring retransmission disputes are one of the reasons the Cable Act of 1992 must be revisited and reformed. The old cable television regulatory structure reduces competition by undercutting smaller providers’ ability to compete on price; increases costs for consumers; and, frustrates millions of Americans by shutting off popular programming during peak viewing periods. In these disputes, it is ultimately the consumer who loses out with both programming blackouts and higher prices.