Experts Debate Retransmission Consent Rules

WASHINGTON, June 8, 2010 - Retransmission consent rules were established decades ago and many communications experts are arguing that it’s time to reevaluate them.

At a BroadbandBreakfast.com Intellectual Property Breakfast Club this morning, members of the broadband environment voiced their opinions and concerns about retransmission consent fees.

Sarah Lai Stirland, the event moderator and BroadbandBreakfast.com’s assistant managing editor, guided the debate, which largely centered around the impact that retransmission fees have on consumers.

Fernando Laguarda, vice president of external affairs and policy counselor with Time Warner Cable, said the threat of blackouts devalues what is being transmitted to customers. When cable system operators and stations debate fees, programming blackouts can occur on contested channels, he said.

However, Antoinette Cook Bush, a partner with Skadden Arps focusing on communications and legislative matters, said there were very few instances of actual blackouts, adding that “the whole focus of the Cable Act was to increase competition, and it has succeeded beyond our wildest expectations.”

In 1992, when the Cable Act was established, there were not as many cable providers as there are today. Bush argued that there is market competition, and that customers dissatisfied with their providers are free to switch to another cable company.

American Cable Association President and CEO Matt Polka said the fees give broadcasters more leverage over smaller cable operators, and that there is a need for consumers to be able to shop for cable providers.

He also said that while the retransmission rules were relevant in 1992 when smaller businesses were competing with the growing cable companies, now cable prices are lower in locations where providers are exempt from those rules. The American Cable Association wants the Federal Communication Commission to reevaluate the retransmission consent rules.

Ovation Executive Vice President Chad Gutstein also advocated reworking the rules governing retransmission consent. He said that independent networks deserve a fair playing field, and that higher fees threaten this.

Michael Calabrese, a vice president of the New America Foundation, also wanted FCC involvement in reforming the retransmission rules, saying that broadcasters already get government subsidies with the expectation that they will air news, weather, alerts and children’s programming.

John Hane, a counsel with the Communications Practice Group at Pillsbury, said in order for broadcasters to charge money, they would have to devalue the idea of “free” and convince people to pay.