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Retrans Fights in Final Round

12/19/2008 7:00 PM Eastern

Charlie Ergen's Dish Network last week dropped nine Pacific Northwest TV stations owned by Fisher Communications, one of several testy retransmission-consent disputes that has erupted or is looming between distributors and broadcasters.

Many retransmission-consent contracts across the nation between cable operators, satellite providers and TV stations are set to expire Dec. 31, and the players have been busy trying to negotiate new agreements before that deadline.

Some deals have already been struck. Last week, Time Warner Cable announced that it had reached new agreements with Granite Broadcasting and Communications Corp. of America (ComCorp). And Gray Television, which operates 36 stations in 30 markets, said it had reached agreements in principle with 20 large cable companies involving 2.4 million subscribers.

But there are several negotiations that have deteriorated, with TV stations going dark as cable and satellite operators balk over how much cash, if any, they should pay broadcasters to carry their signals.

Details remained sketchy at press time about how many broadcasters will pull their stations, or be deleted by cable or satellite, when retransmission-consent pacts expire New Year's Eve. “It's still entirely unclear how extensive the drops will be,” said Matt Polka, president of the American Cable Association, a lobbying group for independent cable operators that anticipates possible disputes.

“We're going to be working the phones and helping our members and getting more of a sense of it,” he said. “A lot of this is all going to come down to the wire. And then we'll see whether broadcasters are willing to grant extensions.”

Dish Network has been in the center of the most recent retransmission-consent standoffs. Last Wednesday, the satellite provider dropped Seattle-based Fisher Communications stations in seven Northwest markets, including a Spanish-language Univision affiliate in Seattle, when the company's retransmission-consent deal with the broadcaster expired.

Fisher promptly filed a $1 million breach-of-contract suit against Dish Network, which wasn't directly related to last week's drops, but alleged prior violations of its carriage deal by the satellite provider.

Also last week, ComCorp said Dish Network might drop its stations in states such as Louisiana and Texas as the two parties tangled over cash for carriage. All this happened just days after Dish Network resolved a retransmission-consent dispute with Young Broadcasting, restoring its 10 stations in 11 markets after dropping them for three days until they reached a new deal.

Right now, there are also isolated retransmission-consent disputes in individual markets. For example, WIBW-TV, Gray TV's CBS affiliate in Topeka, Kan., is warning that it may pull its signals from roughly a dozen cable systems if it doesn't reach a new deal. And Meredith Broadcasting's CBS affiliate KPHO-TV in Phoenix is also threatening to take its station off Cable One come Jan. 1.

For the first time ever, Univision is seeking retransmission consent and cash — a $1 license fee — for its owned-and-operated stations. The Spanish-language broadcaster, which is in talks with operators such as Time Warner Cable, declined to comment last week.

Polka said that due to the ACA's lobbying efforts at the Federal Communications Commission, this round of retransmission talks has actually been easier for smaller operators with at least two broadcasters: The Walt Disney Co.'s ABC stations and News Corp.'s Fox stations.

In July, after the ACA raised complaints about programmers bundling their networks, Disney agreed to let small cable systems carry its ABC stations for free for three years.

And Fox, still bound by conditions placed on it by the FCC when News Corp. acquired a stake in DirecTV, is giving smaller cable systems its signals without compensation, according to Polka. The ACA has asked the FCC to keep those strictures in place even though News Corp. traded its 40% stake in DirecTV to Liberty Media in February.

The National Association of Broadcasters last week said that retransmission-consent agreements are in fact being closed, and predicted that there won't be a rash of station drops come Jan. 1.

“All these deals are getting done, just like we always suspected,” said NAB executive vice president Dennis Wharton. “This is proof positive that retrans works just as Congress intended. There often is a lot of sort of cat-and-mouse playing right up to the very end, but these deals generally get done.”

Wharton added that more than 1,000 broadcasters have committed to a voluntary “quiet period,” from Feb. 4 to March 4, when they would not pull their signals, so there won't be added consumer confusion around the time the all-digital transition takes place on Feb. 17.

The ACA and the National Cable & Telecommunications Association had asked the FCC to set a quiet period that would start no later than Dec. 31, before retransmission-consent deals expired, so broadcasters wouldn't have the leverage of being able to pull their signals during contact negotiations. But FCC chairman Kevin Martin essentially thwarted that proposal.

 

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