Policy

Cox, Cable One Face Retrans Fight

12/30/2004 6:51 AM Eastern

In what could be a harbinger of retransmission-consent battles to come -- over cash for carriage -- a broadcaster was set to pull signals for a half-dozen TV stations from Cox Communications Inc. and Cable One Inc. systems on New Year’s Eve.

At press time, the two operators and Nexstar Broadcasting Group Inc. were at an impasse -- in disputes marked by a flurry of nasty ads -- that seemed unlikely to be resolved by the end of the day Dec. 31.

The issue at the center of the standoffs is one looming as many retransmission-consent pacts expire at the end of 2005: Broadcasters are now seeking cash from MSOs in exchange for carrying their TV stations.

The Irving, Texas-based broadcaster wants cash compensation for Cable One to continue carrying NBC affiliate KTAL in Texarkana, Texas, and ABC affiliate KODE and NBC affiliate KSNF in Joplin, Mo.

Cable One had given away 1,500 rabbit ears in Joplin as of late last week, and it had more coming in to pass out, according to Tom Basinger, vice president of the MSO’s central division.

Nexstar is asking Atlanta-based Cox for cash to continue carrying NBC affiliate KRBC in Abilene, Texas, and two San Angelo, Texas, stations: KLST, a CBS affiliate, and KSAN, an NBC affiliate.

Cox contended that its carriage of only two, and not three, Texas stations is involved in the dispute. The MSO claimed that according to its lawyers, its current retransmission deal for KSAN doesn’t expire until the end of 2005, spokeswoman Amy Cohn said.

Cable One has about 22,000 subscribers in the Shreveport-Texarkana DMA and 34,000 in Joplin. Roughly 40,000 Cox subscribers are involved in Abilene and another 32,000 in San Angelo.

“There are no discussions going on,” Nexstar chief operating officer Duane Lammers said Thursday. “I think we’re going to go off, and I think we may go off forever.”

Both Phoenix-based Cable One and Cox are refusing to pay Nexstar cash, saying that as a policy, they don’t pay broadcasters license fees for retransmission consent.

Cable One claimed that it would have to fork over more than $1 million to Nexstar during the next four years under the agreement the broadcaster has on the table. “The issue is money,” Basinger said. “We refuse to pay cash compensation for a service that has historically been free. This is an important case for us.”

Cox first contacted Nexstar in November about the expiring retransmission-consent deals and it didn’t get a response, Cohn said. It wasn’t until Thursday that the broadcaster notified Cox in writing that it wanted a 30-cent license fee for its TV stations, according to Cohn.

“We have not paid them for retrans in the past,” she said. “We’re trying to protect our customers from higher cable bills and, if we’re forced to pay every broadcaster in the market, cable bills are going to rise. We think it’s unreasonable to pay the broadcasters for free, over-the-air TV.”

Apart from cash, Cox is willing to negotiate “some reasonable compensation,” Cohn said.

Many cable operators have said they won’t pay cash for retransmission consent, as it would set a costly precedent, encouraging hundreds of TV stations across the country to demand similar payment.

The broadcaster’s position is that DirecTV Inc. and EchoStar Communications Corp. are paying to carry its TV stations, and Cable One should do the same.

The standoff between Nexstar, Cable One and Cox is unusual in that it is coming earlier than most, because many retransmission-consent pacts between broadcasters and MSOs are three-year deals that expire at the end of 2005.

For more on Nexstar’s retransmission-consent battle with Cable One and Cox, please see Linda Moss’ story on page one of Monday’s issue of Multichannel News.

September