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Comcast to Introduce $1.50 Broadcast TV Fee

MSO Says Charge Will Offset Portion of Retrans Cost Increases 11/22/2013 2:11 PM Eastern

Comcast is striking back at the high cost of retransmission consent by separating out a $1.50 per month “Broadcast TV Fee” on customer bills, beginning in some markets on Jan. 1.

The move is a departure from how the nation’s largest cable operator had previously offset some of the costs of retrans – by including a portion of them within the overall charges for video. Now Comcast seems to be joining other MSOs in taking the offensive by breaking out those charges for customers to see.

In a letter to Comcast subscribers in its Heartland Region (which includes Michigan, Indiana and Arkansas) Comcast said the $1.50 charge will begin on Jan. 1.

In the letter, Heartland Region senior manager of government affairs Frederick Eaton writes that the fee is to “defray the rising costs of retransmitting broadcast television signals.”

“In the past, a portion of those costs were included within the basic service rate,” Eaton continued. “In recent years, the cost of retransmitting broadcast television signals has increased significantly, and we want to address these increases through a separate itemized charge so they are clear to the customer.”

A Comcast spokeswoman said that other markets will see the Broadcast TV Fee as their 2014 rate cycle begins, which varies between regions. Some customers could see the increase in January, with others experiencing the change in the spring or summer.

The $1.50 charge covers only a portion of Comcast’s total retrans cost increases, the company said. 

Distributors have complained for years about the rising costs of retransmission consent fees. Continued consolidation in the broadcast industry has increased broadcasters’ market power significantly as they have boosted the number of stations they control in individual markets. And on Friday, SNL Kagan revised its retrans revenue estimates, predicting that fees would rise to $7.6 billion by 2019, more than double the $3.3 billion expected this year.

Blackouts during retransmission consent negotiations also have risen significantly. According to the ATVA, there were 110 blackouts so far this year, more than double the 51 in 2011 and well ahead of the 91 blackouts 2012. And as the end of year renewal cycle looms, even more stations could be blacked out.

Comcast has managed to avoid blackouts – it has successfully renewed retrans deals with little or no fanfare over the past several years. And as parent of NBC Universal, Comcast controls about 10 NBC owned and operated stations across the country.

But it appears that even the largest cable operator in the country is feeling the retrans pain.

“Essentially what we are trying to do is address a portion of the increase in broadcast retransmission costs through a separate itemized charge,” said Comcast spokeswoman Jenni Moyer. She added that the MSO is not increasing the monthly charge for limited basic or digital preferred tiers.

Other MSOs have broken out retrans costs on customer bills, including Charter CommunicationsAT&T’s U-Verse and MidContinent Cable.   

“We are by no means the first ones to do this,” Moyer said. 

    

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