Corrected, 3:50 p.m.: Apologies to Phillip Swann for mispelling his name. Also, I incorrectly said Comcast is buying CBS. Comcast is interested in NBC, as I’ve previously reported (sigh).
CATCHING UP: Time Warner Cable led a group on Tuesday asking the government to fix the rising price of TV service.
Well, sort of. The issue wasn’t about a customer’s rising bill but over “retransmission fees,” which TV channels charge to TV providers that want to retransmit the channel to customers. The TV services, of course, blame the fees for pushing up a customer’s monthly bill.
On Thursday, U.S. Federal Communications Commission Chairman Julius Genachowski appeared to have listened. During an Senate committee meeting, Genachowski talked about the retransmission issues and said that the ”framework that is in place … may have lost pace with changes in the marketplace,” reports the L.A. Times.
These retrans fees gets renegotiated every year or so and pretty much always go up. Here is one estimated list of how much a TV customer ends up paying for each channel.
But disputes over retrans fees have left some cable customers wondering if they’ll be staring at a blank TV screen. We here in Orange County felt this over the holidays when Fox threatened to take away channels from Time Warner customers. The fee fight was resolved with no disruption in TV service.
But last weekend, Cablevision customers on the East Coast missed the first 30 minutes of the Oscars because the cable company didn’t come to an agreement in time with Walt Disney-owned ABC.
Time Warner was joined by 13 non-profit groups and other cable, satellite and telecommunications companies. Specifically, the other companies included American Cable Association, Bright House Networks, Cablevision, Charter Communications, DIRECTV, DISH Network, Insight Communications, Mediacom Communications, New America Foundation, Organization for the Promotion and Advancement of Small Telecommunications Companies, Public Knowledge, Suddenlink Communications, Time Warner Cable, and Verizon.
The group asked the U.S. Federal Communications Commission to intervene. Here is the statement filed with the FCC:
Consumers are increasingly being put in the middle of disputes between programmers and distributors, including recurring threats of going dark, high-stakes public negotiations, and, in the case of ABC’s recent withdrawal of programming from three million Cablevision subscribers, highly disruptive blackouts.
In today’s filing, the 14 petitioners asked the FCC to implement new dispute resolution mechanisms –such as compulsory arbitration or an expert tribunal — and require continued carriage of broadcast signals during negotiations or disputes, to help ensure uninterrupted programming for consumers. The petitioners implore the FCC to act expeditiously to help prevent further consumer harm.
Noticeably absent is O.C.’s other cable provider Cox Communications and Comcast Corp., the nation’s largest cable TV provider. The likely reason? Both own TV channels. Comcast not only owns a few cable networks but has a bid to buy a majority stake in CBS NBC. Phillip Swanson Swann, a TV analyst over at TVpredictions.com, blasts Comcast for failing to support its customers. Because Comcast owns several TV channels, it obviously benefits from trying to get more money from rivals.
Added 3:59 p.m.: Swann adds this about Comcast’s snub of the FCC petition: “And they want to make sure that the FCC stays out of the retransmission process because the agency has jurisdiction over broadcast networks, such as NBC. If the FCC stopped the broadcast networks from pulling signals in fee fights, it could cost NBC serious revenue down the road.”
While it sounds like a valiant effort by Time Warner, keep in mind that Time Warner is a business. Despite increasing retrans fees, Time Warner still made $1.1 billion last year. Read the earlier story, “How much money did Time Warner make last year? $1.1 billion.”
Recent TV service news: