Cablevision (NYSE: CVC) is asking the FCC to make "robust" changes to decades-old rules that the company argues give broadcasters an increasingly unfair advantage in retransmission consent negotiations.
In its letter to the agency, Cablevision attorney Samuel Feder argued that "the relationship between broadcasters and multichannel video programming distributors (MVPDs) has changed dramatically since 1992," when Congress issued the 1992 Cable Act. Feder said the legislation views pay-TV operators as a "bottleneck" to program distribution and seeks ways to increase the relative leverage of broadcasters.
"Today, distribution is widely available to broadcasters in many forms and on many platforms," Feder said. "Broadcasters can self-distribute (CBS All Access), distribute through aggregators (Hulu), deploy over streaming services (Sony, Sling TV), publish content on various Internet video services (Vimeo, YouTube), distribute over cable, DBS and telcos, and of course, continue to broadcast over the air."
Feder also said "the tools Congress gave broadcasters to enhance their leverage in carriage negotiations with distributors is disserving customers, resulting in higher fees to operators, driving more broadcast-affiliated cable programming into distributors' video packages, and requiring consumers to pay more for content that they do not want or forego content they do want."
Feder also noted language in Congress' Satellite TV Extension and Localism Act Reauthorization (STELAR) that mandates the FCC to revisit the issue of broadcast retransmission consent.
Retrans fees are rising fast -- SNL Kagan recently said total retransmission fees commanded by broadcast stations will increase to $9.8 billion by 2020.
Another New York MSO, Mediacom, recently petitioned the FCC on the fast-rising fees, as did the American Cable Association.
Two weeks ago, while speaking to the House Energy and Commerce Committee's Communications and Technology panel, MoffettNathanson analyst Craig Moffett said that, "Absent reforms to restrain the runaway growth in programming costs, video will become unprofitable, new builds of broadband will become increasingly economically challenged and therefore will become less and less likely."
On the opposite side of the issue is the National Association of Broadcasters, which formed the TVFreedom.org organization to argue for its position on retransmission consent. TVFreedom.org states that "We believe cable and satellite TV providers should treat all channels fairly -- and that programmers should compensate channels based on the ratings, popularity and quality of the programming each channel provides to viewers."
- read Cablevision's letter to the FCC
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