In a letter to member of the Senate Commerce Committee, Mediacom honcho Rocco Commisso has said his company will gladly hold the line of price increases for subscribers if programmers hold the line on the amount of compensation they get.
Commisso says the situation has gotten out hand due to the FCC’s failure to change the rules to reflect modern conditions in the video programming world.
Commisso was concerned about price hikes from both basic cable channels and broadcasters. He mentioned specifically the recent troubles between Viacom/DirecTV, AMC/Dish and TWC/Bright House/Hearst.
He blamed the program sources in general for rising cable prices. “Broadcasters and cable network owners impose price increases that would be outrageous even in good times, but are simply unconscionable during current economic conditions. The price that programmers demand when an agreement comes up for renewal only moves in one direction – upward, even when ratings decline. For example, our cable networks carriage and retransmission consent fees are going up dramatically this year despite the fact that over the past 12 months ratings for most cable programming channels, local broadcast stations, and national broadcast networks have seen significant declines.”
After requesting intervention on MVPDs’ behalf, he made his proposal: “In the meantime, I would like to enlist Congress and the FCC to lend public support to a proposal that does not require any changes in the law. Specifically, Mediacom is prepared to commit to freezing its published rates for its most popular video service tiers (limited and expanded basic) for two years if the owners of the broadcast channels and cable networks on those tiers likewise agree to freeze the fees they charge for their content. The benefits of my proposal to consumers across America would be obvious if the government does its part in convincing content providers to hold their rates. With your backing, I am confident that a significant number of other MVPDs would join the freeze.”
RBR-TVBR observation: Yeah, that’s fair. Television broadcasters are only now beginning to seek and receive fair compensation for the value they deliver to cable operators such as Commisso. They are only now getting to a level of parity with many basic cable offerings that are barely watched by anybody, and certainly pull far lower local ratings than do local broadcast stations, without the burden of producing valuable but high-cost local programming.
Maybe cable channels should agree to a freeze while broadcasters catch up.
Meanwhile, Commisso’s offer is a way for his company to lock in old, under-priced retransmission contracts with television broadcasters. This is the most self-serving proposal we have seen in quite some time, and we hope that the members of the Committee are smart enough to see it for what it is.