Retrans Framed as Diversity Issue By Both Sides; Hill Unlikely to Act
Fans and foes of retransmission consent rules framed it as a diversity issue, while an aide to a House Commerce Committee member said Congress seems unlikely to change the law anytime soon. Getting paid by multichannel video programming distributors like Time Warner Cable lets Univision add to its Spanish-language programming, General Manager Alberto Mier y Teran of the broadcaster’s Los Angeles stations said. Multichannel video programming distributors have less capacity for non-English programming because retrans and related rules require stations to be on the basic tier, Time Warner Cable Vice President Fernando Laguarda told a panel Wednesday at a U.S. Hispanic Chamber of Commerce legislative conference.
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Mier y Teran and an aide to Rep. Gene Green, D-Texas, said retrans works. Mier y Teran pointed to the lack of any blackout on an MVPD of a Univision station in the approximately four years since the company stopped getting guaranteed cable distribution and instead started getting paid for non-guaranteed carriage. There have been some blackouts in the U.S., but not in recent years in the Houston area that Green represents, said aide Nate Tipton. “The retransmission system doesn’t need to be changed,” Green told us. “The system works and it’s a business-to-business transaction that shouldn’t need congressional action.” That’s “subject to change though if problems develop where an agreement is not reached and service disruptions occur,” he added.
The desire on Capitol Hill to advance retrans legislation seems small, Tipton told the panel, noting he wasn’t speaking for his boss. “I don’t think there’s an appetite for it,” he said, “whether because of policy or politics.” Retrans is a complex and controversial issue, Tipton noted. The FCC isn’t expected to change the rules. (See separate report in this issue.)
Time Warner Cable and Univision have a good relationship, with the two never having had a dispute related to retrans and the cable operator carrying VOD content from the broadcaster, executives of both companies said. Yet “the backdrop is a framework of rules that if we look industrywide, that really pose a problem for consumers” because they give broadcasters too much leverage in retrans deals which lack “effective oversight,” Laguarda said. “Blackouts, increasing fees and reduced capacity for diverse and independent programming” are reasons to change the system, he said. “Retrans fees are going up, and there’s no end in sight” to “billions of dollars out of consumers’ pockets,” he said: “It allows broadcasters to look at a future where they can play distributors off each other” to get more compensation.
Blackouts are bad for TV stations that stand to lose audience and so get lower ad rates, MVPDs that lose the signal and consumers who can’t view a broadcaster on the pay-TV provider, Mier y Teran said. “From a business perspective, it’s not good for anyone” and “would have a negative effect on us, too,” he said. “We know firsthand that the current system for us is not broken,” because Univision has signed about 200 retrans deals since 2008, he said. “We think it is a free market and it should continue to stay that way -- we don’t think it requires the intervention of government.”