The Politics of Retrans

Why the fight between cable and TV stations is aimed at Congress

Make no mistake. The debate in Washington over the cause and remedy for the blackouts of TV stations on cable or satellite is more political posturing than anything else. 

The fact remains that only a very small percentage, less than 1 percent of the 15,000 consent negotiations, end in a blackout. And because most of the carriage contracts between pay TV and TV stations are for only three years, the deals tend to come up in groups, like they have in recent weeks. 

So what's changed? Certainly not the arguments from both sides which follow the same script each time negotiations get tough. Cable and satellite companies charge that broadcasters are greedy, demanding higher fees that will be passed on to subscribers. Broadcasters defend the higher fees, claiming it's only fair compensation for the local content they deliver to consumers.

Cable and satellite groups tried to get the Federal Communications Commission to do something. But the agency has repeatedly said it lacks the statutory authority to stop blackouts. That leaves Congress to change the law or write a new one.

The only thing new in the debate over the Cable Act—the 1992 legislation that established how cable and satellite companies negotiate over carriage of local TV stations—is the hype surrounding it. That's risen to a fever pitch, largely due to a well-coordinated effort on the part of cable and satellite companies to turn up the volume in Washington.

Time Warner Cable, DirecTV and Dish formed the American Television Alliance in 2010, soon after two high-profile retransmission fights between Time Warner Cable and Disney, and Fox and Dish. Since then, the ATVA has put out a steady stream of press releases on every blackout and every potential threat of a blackout, no matter how small the market or how short the blackout.

When a blackout hits (Time Warner Cable and Hearst's 10-day blackout recently ended), it's public relations gold, for both sides. It's especially rich if the blackout is in a market represented by a lawmaker on the Commerce Committee.

The ATVA and its top members start putting out statements, putting together websites and cranking up the social media.

Broadcasters run crawls along the bottom of the TV screen. They, too, post warnings on their websites and direct consumers that they can still pull down the station for free over-the-air.

So now we've come down to Congress. Both the House and Senate Commerce Committees have held hearings before, but now there's some real talk from lawmakers that it may be time to re-examine the Cable Act.

Just one lawmaker even suggesting a review has the ATVA jumping. Ahead of the Senate Commerce hearing today, the ATVA's releases multiplied and the language got really snarky, poking the National Association of Broadcasters at every turn.

"Everybody gets it, including the broadcasters. Yet the broadcasters are clinging to 20-year-old rules that protect them at the expense of consumers…Do broadcasters really think the public isn't on to them?" read an ATVA statement on Monday.

Meanwhile, the broadcasters made sure members of the Senate Commerce Committee got a pile of letters and testimonials, from every corner of the industry, including letters from major TV network affiliates groups, state broadcaster associations, local law enforcement officials, the American Red Cross, the National Alliance on Mental Illness and numerous charities that have benefited from local station community outreach programs.

Conspicuously absent from the debate is the National Cable and Telecommunications Association and Comcast. Now that Comcast also owns TV stations, that puts it directly in the middle, and NCTA president and former FCC commissioner chairman Michael Powell has been careful to say the NCTA is not taking sides. For its part, Comcast has quietly laid in 10-year retransmission deals without incident.

So that's where the debate stands and is bound to stand until at least next year. Meanwhile, the PR and lobby machines will continue to crank.