Retranmission Deals May Get Derailed by DTV Transition, Cable Operators Warn

Sep 16, 2008  •  Post A Comment

The cable industry is urging Congress to insist broadcasters put off any retransmission battles and any chance local TV signals could be dropped from their cable systems until after the digital TV switchover happens Feb. 17.
“I want to raise a flag that a storm is coming,” Kyle McSlarrow, president-CEO of the National Cable & Telecommunications Association, told a panel of the House Energy & Commerce Committee today as the committee examined the status of the digital TV transition.
Mr. McSlarrow warned that with a large number of consent agreements for retransmission expiring at year’s end, there could be some big retransmission battles. He said broadcasters’ new insistence on getting paid for retransmission—most of them have not been paid in the past—creates a “tension” on rights negotiations that could lead to some channels being temporarily dropped. He argued viewers would be confused if channels disappeared or if they suddenly had to pay more for cable just as the transition hit.
“It is increasingly clear that, with the economic pressures on the broadcasting side and more and more hedge funds getting into broadcasting looking for a quick buck,” there could be problems, said Mr. McSlarrow.
“I would urge this committee to make clear that digital transition is not business as usual. This is not the time to confuse consumers about what is happening.”
The National Association of Broadcasters has offered its own more limited moratorium to apply from Feb. 1 to April 1 and has opposed a longer moratorium. Mr. McSlarrow told the committee that wasn’t long enough and that problems likely would hit before that moratorium took effect.
In a statement, an NAB spokesman said, “NCTA’s professed concern for consumers is laughable given cable’s shoddy customer treatment, and we would urge policymakers to reject their scare tactics. Broadcasters are fully committed to a successful DTV transition, and the vast majority of stations have voluntarily pledged that no local TV signals will be withheld from our distribution partners in the weeks before and after the February DTV deadline.”
Federal Communications Commission Chairman Kevin J. Martin told the panel the FCC had learned several lessons from the early DTV switchover in Wilmington, N.C.
He said viewers need to be better informed that they can’t just plug in a converter box at the last minute. A number of the FCC’s calls came from viewers who didn’t understand that they had to at least run an initial box scan or adjust antennas to receive local channels.
Mr. Martin said the other big concern is about the impact of changing station signal patterns. He said the FCC is estimating that 15% of channels will significantly shrink their coverage areas after the switch; FCC engineers are examining the issue.
The Government Accountability Office, delivering an updated report on the state of the transition, questioned whether the Commerce Department’s National Telecommunications & Information Association was adequately prepared for a last-minute rush of requests for $40 government coupons for converter boxes.
“NTIA’s ability to handle spikes in coupons remains uncertain,” Mark Goldstein, a GAO official, told the committee.
Meredith Attwell Baker, acting assistant secretary of commerce, disputed that assessment and said the failure of some people who get coupons to redeem them means the government will be able to send out more coupons.
Congressmen argued over the success of the Wilmington test and its meaning for the rest of the country.
Republicans, among them Cliff Stearns, R-Fla., called the switchover a success, saying less than 1% of the households called in. Rep. Anna Eshoo, D-Calif., said the calls represented 13% of households without cable or satellite.
House Energy & Commerce Committee chairman John Dingell, D-Mich., questioned the test results’ applicability to other areas, nothing the FCC had paid firefighters to help viewers solve their connection problems in Wilmington and was unlikely to offer similar help in larger markets.
(2:40 p.m.: Corrected Rep. Eshoo’s name)


  1. This is what our company has been stating all along. I am glad to see it did not fall on deaf ears, thank you Kyle! The only way we can justify paying off air broadcast is a pass through charge to the customer, Bad timing!
    Gary Slough
    S&T Communications
    Goodland, Ks

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