Customers may suffer
July 19, 1993
If cable companies and broadcasters do not reach a retransmission consent agreement soon, cable subscribers could miss the season premieres of their favorite TV shows this fall.
Retransmission consent, according to Andy Bast, general manager for Warner Cable, is “a brand new right created by the Cable Act of 1992.”
Under this act, cable companies are required to get the consent of broadcasters before retransmitting signals through cable systems.
The terms of consent have not been agreed upon yet. Those terms could range anywhere from signing a form to monetary compensation for retransmission. In any case, a deadline for agreement has been set for Oct. 6.
If an agreement is not reached, Bast said, “In an extreme case, we could be looking at no broadcasters on your (cable) service.” If this happens, Chicago stations will be dropped.
Fourth Ward Ald. Bessie Chronopoulos said DeKalb has no part in making the decision. She said Warner Cable and broadcasters must negotiate the issue and come to a decision on their own.
“The city of DeKalb has no power (in the decision),” Chronopoulos said. “But this decision will affect every household, no question about it.”
Since 1948, broadcasters have been using public airwaves to transmit their signals at no cost. The public spectrum, as the airwaves are more commonly known, is valued at $11.5 billion by the U.S. Department of Commerce’s National Telecommunications and Information Administration (TCI).
Bast said, “They were given this right in exchange for public service.”
When cable system entered the picture some years later, they were required legally to carry local broadcast signals. These rules resulted from the fervent efforts of broadcasters to maximize the reach of their stations.
In 1985, the rules were declared unconstitutional and overturned. Despite the change in rules, cable systems continued to allow broadcasters to transmit signals through the $20 billion cable networks.
The Cable Act of 1992 clearly supports this notion. An excerpt from the act reads, “A cable television system which carries the signal of a local television broadcaster is assisting the broadcaster to increase its viewership and thereby attract national advertising revenues.”
Now supported by the act, broadcasters claim that charging cable companies retransmission consent fees is essential to their financial survival.
“I don’t believe that they are financially strapped,” said Bast. Not only do broadcasters get free use of airwaves and cable systems, but, according to the Television Advertising Bureau (TAB), they also receive about 12 times the advertising revenue of cable companies.
In 1992, broadcast companies earned $24,905,000 in advertising revenue compared to the $2,165,000 earned by cable operators.
Cable companies also oppose the fees because broadcasters have an assumed public service obligation to provide signals at no cost to viewers.
If retransmission fees are implemented, this would mean cable subscribers will be paying for the very signals they already receive for free.
Bast said he especially opposes the fees because TV viewers already indirectly pay broadcasters through advertising. “Retransmission consent fees are a classic example of double dipping,” he said.
The average TV viewer watches about 180 commercials each day, according to “Persuasion”, a book by NIU Professor Charles Larson. Knowing this, countless companies pay broadcasters substantial amounts of money to air commercials.
For this reason and many more, Bast said, “We refuse to pay cash to continue carrying broadcast signals inherently.”