Television group executive Paul Karpowicz fired off a letter to the leaders of each Capitol Hill Commerce Committee explaining the broadcast stance on the retransmission consent controversy. He underscored the fact that the existing rules do not mandate that MVPDs pay so much as a penny for the rights to run local broadcast programming.
Karpowicz is President of Meredith Broadcast Group and Chair of the NAB Television Board. The letter went to Jay Rockefeller (D-WV) and Kay Bailey Hutchison (R-TX) in the Senate and Henry Waxman (D-CA) and Joe Barton (R-TX) in the House.
“Retransmission consent negotiations between local television broadcasters and cable and satellite companies are private, market-based discussions,” wrote Karpowicz. “The retransmission consent rules do not guarantee any compensation. Rather, the rules only provide an opportunity for the broadcaster to negotiate for compensation for the use of its signal.
Karpowicz noted that the FCC found that the negotiations have been carried out on a level playing field and are not in need of any revision, despite recent MVPD claims to the contrary. He added that the FCC can step in if a broadcaster is deemed not to be bargaining in good faith, an event which has yet to take place.
He concluded, “Cable operators and satellite companies derive enormous value from carrying local broadcasters’ signals, and broadcast content is among the most popular programming enjoyed by cable and satellite subscribers. Retransmission consent rules simply ensure that broadcasters have the opportunity to negotiate for compensation for such highly regarded content. The retransmission consent process is a private, marketplace negotiation. For one party to suggest regulatory or legislative changes would begin to tip the scales in its favor. On behalf of your local television stations, we hope that you would resist such suggestions.”
RBR-TVBR observation: It’s always interesting when an MVPD operator accuses a broadcaster of withholding “must-have” programming – all while refusing to pay fair market value for it.
Note that the dynamic here is not the same as the concurrent battle between radio and RIAA over performance royalties. In that battle, radio operators are providing musicians with the best music marketing vehicle in existence at no charge, in return for being able to play their music. It’s a symbiotic relationship. If the labels are going to insist that radio must pay them for the right to market their wares, then radio operators would be wise to set up a rate card and instead start charging for the marketing. What used to be a free spin would evolve into a three-minute commercial. It would be a shame to destroy the decades-old relationship, but that seems to be what RIAA is pushing.
The retransmission relationship is not symbiotic. Many viewers would not subscribe to a cable system that lacked local sources for news and information, not to mention access to the major broadcast networks. Broadcast builds the MVPD subscriber base. How much is this influence worth? The negotiation process comes as close to arriving at a fair figure than any government slide-rule regimen ever could.