Cable and satellite operators take their case to Congress

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First the Federal Communications Commission, now Capitol Hill.

Just hours after revealing plans to ask the FCC to change the rules of negotiation between broadcasters and cable operators, a consortium of distributors led by Time Warner Cable is taking its case to Congress as well.

In a letter sent Tuesday to Rep. Henry A. Waxman (D-Beverly Hills), chairman of the House Energy and Commerce Committee, and Sen. John D. Rockefeller (D-W.Va.), chairman of the Senate Committee on Commerce, Science and Transportation, the group said the so-called retransmission consent rules that allow broadcasters to negotiate fees from distributors were ‘broken’ and that consumers were being taken for a ride.

The outreach to lawmakers and regulators by the cable industry comes in the aftermath of a tough fight between Walt Disney Co. and Cablevision. On Sunday, Walt Disney pulled the signal of WABC-TV, its New York station, from Cablevision’s 3.1-million homes. The two had been unable to come to an agreement on a price for Cablevision to pay for Walt Disney to carry the station. Viewers almost missed the Oscars because of the feud but a deal was reached and the signal was restored just minutes after the show had started.

Cable and satellite companies are concerned about losing the signal of local TV stations during contract negotiations. The consortium is expected to ask the FCC to impose new rules that would take away the ability of a broadcaster to threaten to remove a signal as leverage in negotiations.

Going to Congress and the FCC is not without risk. Neither the broadcast or cable industry are fans of government regulations and there is always the risk that the government could try to impose rules that neither side likes. As President Reagan noted, one of the most feared sentences in the English language is ‘I’m from the government and I’m here to help.’

The National Assn. of Broadcasters said pay television providers such as Time Warner have no problem paying for cable channels that do not have as big an audience as local TV stations. Furthermore, ‘modest retransmission consent revenues help local TV stations fund news operations, community service, and life-saving weather information that viewers across America rely on every day,’ a spokesman for the association said.

-- Joe Flint

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