Rival distributors Time Warner Cable and satellite broadcaster DirecTV teamed up to make their case to the Federal Communications Commission for an overhaul the agency's so-called retransmission consent rules.
According to an FCC filing, DirecTV Chief Executive Mike White and Time Warner Cable head Glenn Britt met with FCC Commissioners Michael Copps and Robert McDowell on Wednesday to discuss the tensions that have arisen over the last few years between broadcasters and multichannel video program distributor over fees broadcasters want in return for carriage of their programming.
"We explained that the retransmission consent fees demanded by broadcast stations continue to skyrocket and that the outdated regulatory regime, which prevents true marketplace negotiations, results in harm to consumers," wrote Cristina Pauze, Time Warner Cable's vice president of regulatory affairs in a disclosure letter.
There have been several examples of heated negotiations between broadcasters and cable operators over distribution deals. The FCC has already launched a review of its rules regarding retransmission consent to see if they need updating to limit the possibility of signals going off the air because the two sides are unable to reach an agreement.
Time Warner and DirecTV also said they told the commission it should require "the unbundling of broadcast and cable programming channels." That refers to companies that own broadcast and cable networks packaging said channels together rather than selling them on an individual basis. News Corp., parent of the Fox network as well as several cable networks, typically tries to bundle its channels together when negotiating with a cable or satellite operator. The advantage to bundling is that a weaker channel can get distribution it might not otherwise get because it is packaged with a stronger one.
Distributors such as Time Warner Cable and DirecTV argue that such bundling ends up saddling the consumer with higher bills and channels they don't want. Several companies that don't own broadcast stations, such as Viacom and Time Warner Inc., also try to bundle their channels.
-- Joe Flint