With a little time on my hands yesterday afternoon, I was scanning my Google Reader when I came across a startling headline. According to a Reuters story, the cable industry is doing an about face on its long standing opposition to a la carte programming.
I began to search for another headline, “Hell Has Frozen Over” or equivalently “Comcast Wins MacArthur Genius Grant for Customer Service”, somewhere in my Reader inbox.
A combination of rising programming costs—6 to 10% per year over the last decade—and competition from satellite TV has eroded the bottom line of the gang that owns the cables, forcing them to consider the unthinkable.
And it has also left them with no choice but to abandon their purported laissez faire philosophy and seek help from a frenemy, the FCC.
Scanning a little further down the Reuters article, there’s a quote from Rocco Commisso, chief executive of Mediacom, about how consumers would benefit from a “carefully constructed a la carte programming.”
I must be in an alternate universe. Cable companies typical view consumers as annoying, penny pinching adversaries. But as adversaries they are pathetic weaklings that you don’t cave into. Along come the content providers, who can negotiate with the cable dragons as an equal—think Mothra vs. Godzilla— and then things start to look a little different.
As in maybe it would be a good idea to let consumers choose their programs thereby avoiding expensive sports programming if they want to. And then we as cable operators might be able to sell more profitable packages rather than forking over moolah to ESPN and local broadcasters who have lucrative contracts with baseball and football teams.
The real solution, of course, is to go to the FCC, that same agency that clearly didn’t have the right to reclassify cable as telecommunications and ask them to look into retransmission agreements.
The underlying issue between pipe owners along with other MVPDs (or multi-channel video program distributors) and content programmers is the retransmission consent rules that were worked out in the last century to give local broadcasters—read NBC, CBS, ABC, and FOX affiliates—the right to negotiate “in good faith” with cable companies over the use of their video content.
I’ve written about (see below) retransmission consent’s complex policy goals of promoting localism while not diminishing the value of copyrights. Leaving policy issues aside, the dispute is about (prepare to be shocked) money. In recent times, the content providers have wanted more of it, leading to blackouts by the cable companies when the parties can’t reach an agreement.
As it turns out, the new posturings of cable CEOs, like Mediacom’s Commisso, just happen to coincide with a recent Notice of Proposed Rule Making by the FCC. Initiated in March, this NPRM is on the very subject of retransmission consent and good faith negotiations.
Digging through the FCC files, I learned about a dispute between Mediacom,a smaller MVPD player with a presence in over 20 states, and Sinclair, a TV broadcaster, over retransmission negotiations. Or as Mediacom referred to these talks, “extortionate threats”.
In 2007 Mediacom took its complaint to the FCC, which decided not to intervene. The FCC’s power in these matters are limited.
And even in this new round of FCC brainstorming, the FCC has said “we do not believe that we have authority to require either interim carriage requirements or mandatory binding dispute resolution procedures.” I won’t bother you with Mediacom’s own comments on the NPRM (see below) but if you didn’t know better you’d swear you were reading something put together by Free Press or Public Knowledge.
I can’t remember the last time I read a cable owner referring to Congressional intent and calling for the FCC to use its super powers in an expansive manner.
Yike, this can only mean a lot of money is involved.
Related articles
- Cable Over the Air (technoverseblog.com)
- In switch, cable operators want to go “a la carte” (reuters.com)
- Cable operator Mediacom blasts FCC (latimesblogs.latimes.com)
- Mediacom Comments on Retransmission NPRM (docstoc.com)
