Industry Opinion

by Matt Polka In 1776 Benjamin Franklin said to the delegates who signed the Declaration of Independence, "We must all hang together, or assuredly we shall all hang separately." Modern translation: Stick together, and we will win. Go your own way, and you will pay. Fast-forward from 1776 to 2005 where cable today is fighting for independence of a different sort – from the tyranny of retransmission consent. This law, imposed in 1992, has become like the sovereign edicts of the 1770s that applied "taxation without representation." Cable operators and consumers, like the colonists, are forced to pay the price dictated by broadcasters, networks and their affiliated programming arms. While raking in the cash, these same broadcasters and their affiliates proclaim the sacred public interest of "localism" as justification to extract billions of dollars from local markets and local consumers. We’ve done the math. For ACA members alone, retransmission consent will cost 1 billion dollars, with a "B." Reflect on this. What will retransmission consent cost your cable business and your customers over the next three years? Furthermore, what will retransmission consent cost the entire cable industry? It won’t be cheap. Your answer shows why basic cable rates continue to rise year after year. Let me quote another statesman: "No one should be paying broadcasters more to be able to see ‘free, over-the-air’ broadcasting. If [broadcasters] want a business like that, they should give back the free public spectrum first. It’s time to repeal retransmission consent," Steve Effros wrote in CableFAX Daily, Feb 24, 2005. (Notice, Steve, I didn’t say "elder!") He’s right. Retransmission consent has got to go. Unfortunately, we shouldn’t expect retransmission consent to be repealed anytime soon. The broadcast conglomerates won’t let it. But what then can cable do in the meantime? Let’s take a page from Ben Franklin’s playbook. Let’s hang together, before we all hang separately. The Federal Communications Commission on March 17 opened a petition filed by the American Cable Association seeking changes to current retransmission consent and broadcast carriage rules. ACA’s petition asked the FCC to take away a broadcaster’s right to market exclusivity – network non-duplication – when the broadcaster elects retransmission consent and demands some form of monetary payment – cash, carriage of affiliated programming, etc. Without market protection, broadcasters could not demand a monopoly price for retransmission consent, because cable operators would have the right to "shop" for a better deal from a station or network feed from another market. ACA’s petition also asked the FCC to ban provisions in network affiliation agreements that would prevent an out-of-market broadcast station from granting retransmission consent to a cable operator. If a broadcaster felt it needed exclusivity to ensure local carriage and protect its ad market, all it would have to do is elect must-carry or not charge for retransmission consent. ACA wants a competitive market for network programming to discipline the price of retransmission consent. The facts show that when a broadcaster faces competition, its retransmission consent "price" comes down. Every cable operator can and should provide comments to the FCC on the harm and cost of retransmission consent in their markets and why retransmission consent and related rules should be changed. The deadline is April 15. If cable hangs together to fight the tyranny of retransmission consent, cable and our customers will win the revolution. Matt Polka is president and CEO of the American Cable Association. ACA advocates issues and concerns of independent cable operators before Congress and the FCC in Washington, D.C. T: 412-922-8300 F: 412-922-2110 [email protected]