NAB and NCTA grapple on the issues

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Marci Ryvicker and her colleagues at Wachovia Capital Markets refereed a meeting of the minds last week featuring David Rehr of the National Association of Broadcasters and Kyle McSlarrow of the National Cable and Telecommunications Association. Wachovia observed quite a bit of common ground: a love of free markets and capital flow; a love of competition; all of which leads to victory for the consumer. Big issues standing in the way are retransmission and multicast must-carry.


On retrans, Rehr said that satellite and telco recognize the value of broadcast programming and are willing to pay for it, and predicted that cable will soon come to the same conclusion; both Rehr and McSlarrow seemed to agree that quiet negation was preferable to government intervention, and that the market would eventually rule. McSlarrow thinks that must-carry is probably unconstitutional, while Rehr sees broadcasters' critical and unique local role as worthy of some regulatory assistance. Neither foresees any imminent changes, although there is an elephant in the room – multicast must-carry – which must be addresses soon with each side diametrically opposed. NCTA points out that must-carry, which it sees as forced bundling, is the opposite of a la carte, or forced unbundling, and McSlarrow seems stunned that they would be facing issues with both at the same time. The fact that an upcoming anti-violence bill from Sen. Jay Rockefeller (D-WV) will not include an a la carte nod to proponent FCC Chairman Kevin Martin is seen as a big win for cable.

NCTA is girding for its already-initiated battle with telco entry into MVPD and is expecting good things from its triple-play packages; NAB is relying on strong programming brands and improvements in the DTV revolution, and counting on the fact that much TV watching is live to counter DVR ad-skipping trends.

On ownership, NAB's goals appear relatively modest, aimed mainly at clearing up the uncertainties in broadcast/newspaper cross-ownership and allowing struggling small-market television a chance to double up before one of the stations is facing bankruptcy. McSlarrow said a proposed 30% national cap on cable affects only Comcast at the moment and defending against it is not a priority.

NAB will continue its fight against XM/Sirius and expects to prevent a monopoly from being formed. And McSlarrow noted that he saw little to fear from a Democratic government, noting significant deregulation during the Clinton years and praising the command of telecom issues exhibited by many Democratic members.

TVBR observation: Some of the recent retrans battles have gotten quite ugly and have highlighted the rancor which exists between NAB and NCTA. This session was encouraging in that the two organizations acknowledged their interdependence, and seem highly committed to moving forward for their mutual benefit. We would suggest that the key will be for each to think not of their strongest members. A huge cable system in a major market and the market's big network affiliates are going to play ball. If the two organizations can come up with something that works just as well in Glendive, Montana, we can rest assured that a firm foundation for the future has been installed.


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