Big Shift in Cable Lineup Ahead
Prato, Lou, American Journalism Review
Cable television subscribers shouldn't be surprised if later this year some of their favorite programs are no longer available. These could include a local newscast or even the Super Bowl. Subscribers also may have to pay higher rates to receive such news and information services as CNN, C-SPAN and ESPN.
That might not have been the intent of Congress when it passed a law last fall mandating new programming, service, and rate regulations for the cable industry. The new rules were supposed to benefit the public by improving service, and making cable cheaper and cable operators more responsive to consumer complaints.
In reality, the rules have squeezed the public between the contending interests of two powerful businesses--cable and broadcasting. Their prime battle is over what's called "must carry/retransmission consent." For years, broadcasters have complained that cable operators have carried station and network programming without paying for it. To comply with the complicated new law, cable systems may have to negotiate with all local stations for permission to retransmit the broadcasters' signals.
The law requires a cable system to carry local stations' programming as a part of its basic package, but the cable operator does not have to compensate broadcasters for doing so. However, if a station demands money, the cable system has the choice of either paying or not carrying that station.
Many cable system owners and broadcasters have taken a hard line. Several cable operators, including the nation's largest, Tele-communications Inc., say they won't pay for something that is free for anyone with a television set. ABC, CBS and NBC say the stations they own should be compensated. Gary Chapman, president of Lin Television Corp., which owns seven stations, says cable should pay for broadcasting programs just as it does for cable shows.
"Cable systems already pay 3.5 to 60 cents [per subscriber] for cable programming like ESPN," Chapman argues, "yet they complain about paying for over-the-air broadcasting that collectively represents 75 percent of what they offer. Now, if TCI in the Dallas-Fort Worth market doesn't want to carry our NBC station without paying, can you imagine the reaction if they can't show the Cowboys in the Super Bowl? Obviously we believe there is value in broadcasting that should be compensated."
Perhaps the most intriguing perspective on the conflict comes from executives at multimedia companies that own cable systems and television stations in different markets. One such company is Viacom Inc. …