Executive Editor's Letter: A Retrans Solution?

Cable World, August 29, 2005

By John P. Ourand

Retrans is going to be around for a long time. Government isn't going to overhaul it this year. It won't touch it next year. And it probably won't look into it the year after that, either.

That's because most of the industry really doesn't care about it. Why should the biggest MSOs want government to fiddle with retransmission consent when they've already cut their long-term retrans deals?

The problem is that everyone's willing to bitch about it, but it's the small guys who really feel it. And, for the most part, it's the small guys who are willing to take a stand.

You couldn't take two steps at the ACA/NCTC meeting in San Diego in early August without hearing someone complain about it. Retrans allows broadcasters to demand cash-for-carriage or force a suite of channels onto cable systems as part of negotiations. Because of that, small operators are finding their channel capacity filling up and their video profits draining fast.

That's why ACA has been agitating for government to step in and do something--anything!--to level the playing field.

But small operators also are looking to market solutions to help them regain leverage. ACA president/CEO Matt

Polka warned that some of the smaller guys will let certain broadcast networks go dark in the coming months.

At the San Diego meeting, Cable One chief Tom Might offered a blueprint for how small operators can do that. He allowed Nexstar Broadcasting to pull three stations from his systems in two markets: Joplin, Mo., and Texarkana, Texas. Cable One has lost subscribers since the retrans spat began in January. But the broadcasters have been hurt far worse, he says.

"Broadcasters need us more than we need them," he told NCTC attendees.

That's a better solution for cable than inviting government into its business. There isn't a simple system that could replace it. If government were to do away with retrans, what would take its place? Must-carry? Digital must- carry?

Since retrans especially whacks small-market operators, maybe retrans should only apply in major markets. Maybe operators should be given a choice between retrans and must-carry.

None of these solutions is attractive. And it's not a good idea to have government decide who should have leverage in business negotiations.

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