# Retransmission fee disputes - satellite and cable join forces



## phrelin (Jan 18, 2007)

From the AP via Yahoo:


> Cable, satellite TV and other video providers have asked the government to intervene in ongoing fee disputes with TV networks - big-money fights that are expected to escalate this year as more contracts expire.
> 
> ...Rising tensions between cable and the networks has brought together one-time rivals including Time Warner Cable Inc., Dish Network Corp., DirecTV Inc., Verizon Communications Inc., and even a consumer rights group.


I know there's a thread in the Dish forums because of a Dish PR release. But this joining of forces could be significant, particularly if we, the public, were to start sending communications to the FCC and Congress.

Also note from the story:


> One cable company was conspicuously absent from the petition sent to the FCC.
> 
> Comcast, the nation's largest cable operator, will become a broadcaster if its plan to take control of NBC Universal is approved.


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## phrelin (Jan 18, 2007)

I'm not sure this is the right forum area for this. But I guess it is a regulatory issue despite the fact that the damage OTA channels can do to the reelection chances of a member of Congress likely will keep any legislation off the floor of either house.

IMHO retransmission disputes between satellite and cable carriers and "free to viewers, federally licensed, local OTA channels" will be the most disruptive activity affecting viewers in the near future. And between now and 2020 it will result in the most expensive rate hikes in the history of DBS services.

Since there won't be much *****ing and moaning here about the disputes that don't affect DBS customers, I'll try to post an occasional item relative to the subject that we might not otherwise take note of.

For instance, Sky Report though usually devoted to satellite subjects noted this morning:


> According to an emailed statement from TWC, the big hangups in the TWC/Sinclair retrans battle are The CW and MyNetworkTV stations. TWC doesn't want to pay for the nets; Sinclair wants all of its stations on the table. Midnight Dec. 31 is the deadline. --- According to News Channel 2 (WKTV-NBC) in Utica, NY, Time Warner Cable has been importing NBC affiliate WBRE from Scranton, PA into the area as it fights a retrans battle with WKTV owner Smith Media.


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## SayWhat? (Jun 7, 2009)

_"free to viewers, federally licensed, local OTA channels" _

Like I've said before, there should be no fees permitted for those channels and services. Cable and Satellite increase their viewer base, so they would be wiser to increase ad rates accordingly instead of effectively making the viewer pay to watch them. This is one of the reasons I don't get locals via Dish. I can get them OTA, so there is no reason to pay for them.

Also as I've said, I could agree to a nominal fee to cover get the local(s) to the uplink node ot headend, but that could be built in to the base package rate if locals were included for all customers of a provider.


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## James Long (Apr 17, 2003)

phrelin said:


> I'm not sure this is the right forum area for this.


You're in the right place.



SayWhat? said:


> Like I've said before, there should be no fees permitted for those channels and services.


Agreed. "Must Carry" should be the only option with "Consent to carry" abolished. If that comes at the price of statutory licensing (such as exists for distants) that's fine ... but no more arguing between stations and providers over carriage.



> Also as I've said, I could agree to a nominal fee to cover get the local(s) to the uplink node ot headend, but that could be built in to the base package rate if locals were included for all customers of a provider.


It pretty much is. The $5 per subscriber DISH line itemed and $3 per subscriber for DirecTV are not the full cost of carrying locals. Hundreds of receive sites, leased backhauls, uplink centers and spot beam satellites that would not be needed if there were no locals carried all play in to the infrastructure cost of carrying locals. Costs that exist regardless of any "retransmission consent" fees.


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## joshjr (Aug 2, 2008)

SayWhat? said:


> _"free to viewers, federally licensed, local OTA channels" _
> 
> Like I've said before, there should be no fees permitted for those channels and services. Cable and Satellite increase their viewer base, so they would be wiser to increase ad rates accordingly instead of effectively making the viewer pay to watch them. *This is one of the reasons I don't get locals via Dish. I can get them OTA, so there is no reason to pay for them.*
> Also as I've said, I could agree to a nominal fee to cover get the local(s) to the uplink node ot headend, but that could be built in to the base package rate if locals were included for all customers of a provider.


You stick with that and see what happens in the future. My bet is OTA goes away eventually. Then we shall see what you choose. On the other hand I also think they are going to have to restructure the affiliate model as well. There really is no need for so many affiliates.


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## runner861 (Mar 20, 2010)

Charles Ergen when he appeared before Congress over a year ago during the hearings for reauthorization of STELA brought up the issue of carriage of local stations. He asked that Congress abolish retransmission consent, or, in the alternative, set up a statutory scheme of payment for the license to carry a local station in which the fee would be predetermined, presumably either by formula or by a governmental body. This would be a similar situation to the distant station license. Anyway, the members of Congress at the hearing indicated that they weren't interested in going into that area at that time.


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## kenglish (Oct 2, 2004)

joshjr said:


> ..... My bet is OTA goes away eventually. Then we shall see what you choose. On the other hand I also think they are going to have to restructure the affiliate model as well. There really is no need for so many affiliates.


You could also say that "There is really no need for so many local newspapers".

But, what happens when you live in a medium-sized community, and the news is all centered on the large city near you. Without your local news media, how do you get the information that concerns your community?


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## James Long (Apr 17, 2003)

kenglish said:


> You could also say that "There is really no need for so many local newspapers".
> 
> But, what happens when you live in a medium-sized community, and the news is all centered on the large city near you. Without your local news media, how do you get the information that concerns your community?


Some newspapers do a good job of covering suburbs and areas outside of the city center. Some even have special editions for their core and different suburbs and regions they also cover. While a truly local paper may tell you who made the elementary school honor roll and what the lunch menu is the "big city" newspaper can do fine with the real news - issues of life, death and property.

The granularity of local news does not exist on television as it does in local newspapers. I'm sure one could find an example of a local TV station that served a smaller community well but one would likely find a newspaper in that community and even smaller communities still doing their job. So in television we've already moved into the realm of which you speak ... where all news IS centered on the large city nearby instead of local communities. In order for small town news to be featured on the 22 minute TV newscast it must be important enough to the people of the large city to be carried ... or at least not so unimportant that the majority of viewers change the channel looking for real large city news.

And while there are good stations many have pushed away from local news. Buying newscasts from other stations or playing syndicated reruns or celebrity "news" shows in the slots where news would normally play. If local news is your one reason to keep local TV alive then half of the stations could easily fail to clear the bar. Network stations generally do better but there are network affiliates with no news department. (And local TV is still large city TV on the scale including newspapers.)

So what are we left with as a reason for local TV? Local commercials?


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## SayWhat? (Jun 7, 2009)

^^ My truly local (geographically closest) station [NBC] is a total waste as far as news and weather. I wish I knew how to describe how bad they are, yet they get awards somehow. Maybe if you're the only station in an area, you get all the awards? Their X.2 channel is RTN though, so I'll give them credit for that, but I rarely if ever watch their X.1 main channel or X.3 'weather' channel which is more like their own 'promote thyself' channel.

I get my local news and weather from the next closest station [CBS/CW] 70 miles away.


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## kenglish (Oct 2, 2004)

I think that the lower half of the DMA List (about DMA #50 and smaller) are all markets that are "served" by their local affiliates. I'm originally from Macon, Georgia (#122), and I can assure you that the Atlanta stations could care less about what happens in Macon, except when a local politician makes a fool of himself.
And, there's no way that most Macon businesses could afford to advertise on Atlanta stations, so there's still a need for them (and their somewhat limited coverage areas). The ad base for Macon includes dozens of nearby counties in their DMA ("Designated Marketing Area", which is defined as counties that trade with nearby counties, surrounding a larger city or town, on a regular basis), so there is a need for advertising and news that affects the smaller towns and cities, and their residents.


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## phrelin (Jan 18, 2007)

A followup from The Evening Bridge:


> Sinclair issued a press release saying Time Warner Cable (TWC) rejected a Most Favored Nation (MFN) deal and ended negotiations ... so Sinclair will take its 33 stations off TWC systems serving some 8.5M "primary service units." --- Here's TWC's statement: "Sinclair's statement is false. Time Warner Cable has at no time told Sinclair that we were terminating negotiations. To the contrary, it is Sinclair who has repeatedly over the last 3 months declared discussions to be at an end and this is more of the same from Sinclair. Time Warner Cable has presented Sinclair with at least three possible solutions, including arbitration for Sinclair's Big 4 stations. We remain open and willing to negotiate a reasonable agreement for our customers and have no intention of declaring negotiations to be at an end even in the event that Sinclair decides to pull their signals from Time Warner Cable on December 31st."


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## phrelin (Jan 18, 2007)

Suddenlink serves communities in Arkansas, Louisiana, North Carolina, Texas, and West Virginia. Suddenlink is in a dispute with Viacom. From Multichannel News:


> With the contract set to expire on Dec. 31, Suddenlink alerted its subscribers that Viacom wants a 20% hike in overall programming costs as part of a package that would include movie service Epix.
> 
> On its Web site, Suddenlink told its customers that it continues to negotiate with Viacom, reminding its subscriber base that the contract concludes at midnight on Dec. 31.
> 
> ...


Suddenlink has added a new wrinkle on their bill. On their website they explain their Broadcast Station Surcharge as follows:


> Suddenlink customers may notice a "broadcast station surcharge" on their bills. That surcharge reflects the charges levied by the owners of broadcast TV stations.
> 
> Unlike cable TV networks, broadcast TV stations distribute their signals over the air, using free spectrum granted to them by the federal government. In effect, taxpayers subsidize the distribution of broadcast TV signals. These same broadcast TV stations are then allowed by the government to charge for their signals - and if we don't agree to pay, broadcasters can force us to drop their channels.
> 
> ...


That approach at least focuses the source of price increases due to Congress allowing federally licensed broadcast stations to charge. As this retransmission thing gets out of hand, perhaps our satellite companies could bill by DMA listing what they have to pay for each block of stations owned by one owner.

You could then send your bill to your favorite Congressman who can repay you out of the millions donated by the broadcast business to reelection campaigns in return for legalizing this thievery.


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## MysteryMan (May 17, 2010)

Congress-the opposite of progress.


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## phrelin (Jan 18, 2007)

In what looks to me like a gutsy, _albeit_ illegal, move Time Warner Cable has chosen to import outside signals in their dispute with Smith Media. From TVNewsCheck:


> Nexstar Broadcasting has risen to the aid of Smith Media in its ongoing retransmission consent dispute with Time Warner Cable in two upstate New York markets, asking the FCC to enjoin TWC from importing Nexstar signals into the two markets as substitutes for local Smith Media ones.
> 
> Denied retransmission consent by Smith for its affiliates in Utica, N.Y., and Burlington, Vt.-Plattsburgh, N.Y., Time Warner Cable on Dec. 16 began importing affiliates of the same networks from other markets.
> 
> ...In Burlington-Plattsburgh, it replaced ABC affiliate WVNY with Nexstar-managed WUTR. Smith operates WVNY through a shared services agreement. Also in the market, it replaced Fox affiliate WFFF with WNYF-CA Watertown, N.Y., which is owned by Amy Tuchler, of Northbrook, Ill.


This importing could go on for a couple of months. And while the FCC is sure to issue a cease order, it's going to force these local retransmission disputes back up to the attention of the FCC and ultimately to Congress.

None of these cities is New York or Philadelphia and Smith Media isn't News Corp (Fox). We need to keep in mind that while News Corp has set the bar for a media company screwing the public, there still is a chance to pressure Congress.

But while we're standing around picking our noses, these media companies are picking us off a few at a time in order to pick our pockets in the future knowing we'll blame the cable/satellite/telco company for rate increases.


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## BenJF3 (Sep 12, 2008)

phrelin said:


> In what looks to me like a gutsy, _albeit_ illegal, move Time Warner Cable has chosen to import outside signals in their dispute with Smith Media. From TVNewsCheck: This importing could go on for a couple of months. And while the FCC is sure to issue a cease order, it's going to force these local retransmission disputes back up to the attention of the FCC and ultimately to Congress.
> 
> None of these cities is New York or Philadelphia and Smith Media isn't News Corp (Fox). We need to keep in mind that while News Corp has set the bar for a media company screwing the public, there still is a chance to pressure Congress.
> 
> But while we're standing around picking our noses, these media companies are picking us off a few at a time in order to pick our pockets in the future knowing we'll blame the cable/satellite/telco company for rate increases.


The Smith Media/Time Warner debacle is happening adjacent to me. I'm in a crossover DMA and technically served by Syracuse (so I still get WKTV), but Syracuse doesn't cover our area - Utica does. As of today, Nexstar is filing suit saying Time Warner broke the DMA Restriction by bringing in an outside NBC signal. The mayor of Utica is a comical move is threating to revoke Time Warner's franchise unless the put WKTV back on. He is soliciting other cable providers now. That's comical because he obviously is clueless or taking direction from the local station about how retransmission consent actually works. WKTV/Smith are the ones who pulled the signal. My question to the mayor is what will he do when his new cable provider moves in and doesn't agree to pay what Smith is asking?

My guess is that WKTV at the local level is really hurting. I still watch and the advertises left in droves when they pulled the channel from Time Warner. Time Warner was effectively 70% of their viewers. The bulk of ads now are minor players and mostly station promos. The other think WKTV was banking on was outrage from viewers which didn't happen. Sure, some people went with Dish Network and others listen to the one sided propaganda the station reports, but the vast majority turned on the station.


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## runner861 (Mar 20, 2010)

This is an interesting dispute to watch. The laws that govern cable carriage of broadcast stations are different than those that govern satellite carriage. Time-Warner may be taking a stand to gain some leverage in the retransmission consent battle. The only thing that Time-Warner risks, as far as I know, is paying some civil damages, and they seem to be willing to take that risk.

This can drag out for a while. Although Nextar and Smith are asking the FCC to stop Time-Warner, most likely Time-Warner can ignore the FCC if it wishes to do so. The FCC proceedings are administrative, and usually the losing side in an administrative proceeding can appeal into court. That will take some time. Ultimately a court can enforce an order.

Perhaps Time-Warner thinks that Smith can't make it much longer without being on Time-Warner's system. Just look at the previous post. It looks like Smith is in trouble.


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## phrelin (Jan 18, 2007)

From the AP:


> After weeks in limbo, about 4 million of Time Warner Cable's customers will no longer have to worry about losing one of their network TV stations.
> 
> Just hours before a midnight deadline, the company announced Saturday it has reached a deal in principle with Sinclair Broadcast Group Inc. over the fees it pays to carry Sinclair broadcast signals, including those from local affiliates of Fox, ABC and CBS.
> 
> ...


Sinclair and Bright House have extended their negotiations.


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## phrelin (Jan 18, 2007)

So we now are beginning to see the "benefits" of retransmission fees. From The Evening Bridge:


> Gray Television reported Q4 record revenue ... including, "Retransmission consent revenue increased $1.1 million, or 29%, to $4.8 million."


From Wikipedia:


> Gray Television currently owns 36 television stations serving 30 mainly mid-size and small-size media markets. (The highest-ranked market Gray serves is Knoxville, Tennessee, the 59th ranked market in 2008.) One of the stations is affiliated with FOX, 6 are with ABC, 10 are with NBC, and 17 are affiliated with CBS (making Gray the largest independent owner of CBS affiliates in the country).
> 
> Among their stations, Gray also operates a total of 38 digital subchannels. Eleven of the subchannels are affiliated with MyNetworkTV, 7 are with The CW, 5 are with FOX, 1 has no network affiliation, 1 repeats a cable-only ABC station, and 5 broadcast weather information exclusively.
> 
> ...The combined TV station group reached approximately 6.1% of total U.S. TV households.


Gray also operates most of the Young broadcast stations under receivership and probably will acquire them.


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## James Long (Apr 17, 2003)

I have a Gray NBC in my market ... carried in HD. Their subchannel is a centercut SD of the main channel. Worthless.


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