NCTA Declares War Over Retrans
National Cable & Telecommunications President Kyle McSlarrow this week warned Congress of a "coming storm." He wasn't talking about Gustav or Hanna or Ike.
He was talking about a campaign — a campaign that NCTA will lead next year — to gut the retransmission consent rights of broadcasters so that cable operators will not have to pay monthly fees for TV stations as they now do for every cable network worth watching.
Testifying at the House heading on the DTV transition, McSlarrow, according to B&C, digressed to say that TV station groups owned by private equity firms and "hedge funds looking for a quick buck" were now trying to gouge cable operators by ratcheting up their fee demands by as much as 500 percent.
To date, NCTA has taken a back seat to the American Cable Association, allowing that organization of small operators to wage the battle to wreck broadcasters' retrans leverage. The ACA has kept the issue in front of Congress, but has made little progress.
According to Washington insiders, McSlarrow's comments this week were the first public sign of a recent NCTA decision to go all-out on retrans next year. NCTA is looking to do one of two things, the sources say.
First would be to make sure that network affiliated TV stations no longer enjoy the exclusive rights to network programming within their markets. That way, cable operators who can't make a deal with the local NBC affiliate could import an NBC affiliate from a neighboring market.
An alternative would be to take retrans out of the realm of private negotiations by setting up some kind of panel that would set the rates that broadcasters may charge. I'm not sure what NCTA has in mind, but it sounds like something the Copyright Royalty Board could handle.
Either way is bad news for broadcasters.
Most have already factored retrans dollars from cable into their budgets and see them as critical offsets for sharp decreases in national spot and the loss of network compensation.
They can ill afford to have the retrans revenue stream choked off, even before it has really begun to start flowing.
NAB President David Rehr was seated right next to McSlarrow at Tuesday's hearing as McSlarrow essentially declared war on retrans. Rehr stoutly defended retrans, saying that broadcasters have invariably negotiated in good faith.
But the real challenge comes next year when the NCTA turns its full attention to retrans. NAB will need to be at the top of its game — and at full strength.
Rehr must make sure that he has all the right people in all the right places on the Hill when the new Congress organizes itself and starts conducting serious business.
If things go badly for NAB on this issue next year, Rehr won't be able to say he wasn't warned.
Harry A. Jessell is editor of TVNewsday. You may contact him at hajessell@tvnewsday.com.
Copyright 2008 TV Newsday, Inc. All rights reserved.
This article can be found online at: http://www.tvnewsday.comhttp://www.tvnewsday.com/articles/2008/09/19/daily.8/.
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