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Government to the Rescue in the Retransmission Consent Quagmire?

Thursday, March 11, 2010, 10:08 AM ET
posted by: Will Richmond
Earlier this week, in "Will Nasty Fee Fights Fuel Consumers' Cord-Cutting Interest," I conjectured that last weekend's WABC-Cablevision retransmission consent fee fight (the most recent of many fee fights) would ultimately sow consumers' interest "cutting the cord" in favor of free, online-only alternatives. Obviously that would be bad news for multichannel video programming distributors (MVPDs), but it would also be bad for the whole video ecosystem that depends on consumer payments for its economics to work.

In this context it's only mildly surprising that subsequently this week a group of MVPDs including Time Warner Cable, Cablevision, DirecTV, Verizon and others petitioned the FCC to intervene and revise the retransmission consent rules (for what it's worth, I can't remember the last time MVPDs asked the government for anything, except to stay out of their business). In a sure sign of who currently has the negotiating leverage, broadcasters sent their own letter saying the playing field was level and in no need of a review.

With broadcasters intent on getting paid for their signals, there are many chapters yet to be written in the retransmission consent story. The big risk here is that the parties' jousting will ultimately kill the proverbial golden goose, with consumers getting fed up and deciding they'll make do with whatever they can get through the combination of good old-fashioned antennas and a cheap convergence device that hooks their broadband connection to their TV. Cord-cutting has lacked a strong catalyst to date, but history shows that a wronged consumer is a motivated consumer. The TV industry as a whole needs to figure out the retransmission morass before consumers take things into their own hands.  

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Categories: Broadcasters, Cable TV Operators, Satellite, Telcos

Related Analyses:
Will Nasty Fee Fights Fuel Consumers' Cord-Cutting Interest? (03/08/10)

Tags:
Time Warner Cable, Cablevision, DirecTV, Verizon, NAB


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2 Comments posted

Thursday, March 11, 2010, 03:34 ET
I am curious as to how the retransmission rights rules impact companies like Clicker who either already are or are planning to offer broadcast television through their box in addition to web video.
Lisa
Thursday, March 11, 2010, 06:53 ET
Wow NATPE I thought you were supposed to be the Broadcaster's Champion. What about free-over-the-air-new-fashioned-digital-broadcast television. What about multi-casting stations that now offer many free alternatives to cable, satellite, and strobing internet TV--with a better picture. Call me stupid but I prefer not to pay over $100 a month to some HUGE corporation and watch Free Digital TV. An antenna costs a fraction of one month's bill. That's what I call "Cord Cutting".


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