Cable operators and broadcasters turn up the volume -- again
There is no calm before the storm when it comes to the tense relationship between broadcasters and the cable industry. There is just a constant storm.
The latest thunderclap comes from the cable industry. A group of big cable and satellite operators are teaming up to form the American Television Alliance. The goal of the ATVA is to act as a mouthpiece in the industry's ongoing battle with local television stations over carriage fees.
At issue are so-called "retransmission consent" fees that broadcasters want cable and satellite operators to pay them in return for rights to carry their signals. Although Congress passed a law back in 1992 allowing broadcasters to charge pay TV operators, both sides continue to bicker about the issue and consumers often get caught in the middle.
Late last year, Fox and Time Warner Cable got in a shouting match that almost led to Fox's TV signals being yanked from Time Warner Cable systems across the country. However, a deal was ultimately struck.
Earlier this year, Walt Disney Co.'s ABC did pull its signal briefly from Cablevision Systems Corp., causing subscribers in New York, New Jersey and Connecticut to miss out on some of the Oscars. In a few months, Time Warner Cable and Disney are expected to have a very tense negotiation over the same issue.
The members of the ATVA include Time Warner Cable, satellite broadcaster DirecTV, Cablevision and AT&T. The ATVA is really just an outgrowth of a petition that many big pay TV distributors filed at the Federal Communications Commission earlier this year asking the FCC to prohibit broadcasters from, among other things, pulling their signals from cable systems when carriage deals can't be struck. Broadcasters, naturally, are against that and the FCC itself has not indicated any great desire to rewrite the rules of negotiation between broadcasters and cable companies.
The ATVA said in its release touting its formation that its goal is to "ensure consumers are not harmed or their favorite shows held hostage -- in negotiations for carriage of broadcast programming."
The broadcasters laughed off the idea that the cable industry is now in the consumer rights business.
"The notion that Time Warner and its Big Pay TV allies are part of a group designed 'to protect consumers' is about as credible as BP executives joining Greenpeace," cracked Dennis Wharton, an executive vice president of the National Assn. of Broadcasters, the chief lobbying arm of the local television business. "Pay TV," he added, "built its business on the backs of broadcast programming, and it is not unreasonable for local TV stations to expect fair compensation for the most-watched shows on television."
Some cable operators wear two hats in this battle. While Cablevision has come out swinging against broadcasters seeking fees for their local stations and using the threat of pulling their signals as leverage in negotiations, its own cable networks including AMC are in a similar fight with AT&T. Cablevision's Rainbow Media, which includes AMC, is taking that battle public and warning AT&T subscribers they might miss the season premiere of "Mad Men" if an accord is not reached.
-- Joe Flint