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Sun, Jan. 19

Cable, television negotiations fare differently across country
Mohave County Suddenlink customers dodged CBS 5 blackout

KINGMAN - Cable companies and TV stations throughout the country negotiate retransmission consent contracts more often than one would think, and customers are often faced with threats of station blackouts when negotiations go awry.

When the Meredith Corporation, which owns KPHO CBS 5, and Suddenlink reached a last-minute deal Dec. 30 regarding retransmission consent, Mohave County Suddenlink customers dodged a CBS 5 blackout.

In other areas of the country, people were not so lucky.

According to Corpus Christi, Texas, Caller-Times reporter Mike Smith, negotiations between Time Warner Cable and Cordillera Communications - the owner of the Corpus Christi NBC affiliate - broke down, prompting a blackout of the station Jan. 1.

It's been more than a week since the station was pulled, yet no agreement has been reached. Time Warner customers in Corpus Christi were unable to see the Houston Texans first-ever playoff victory Saturday over the Cincinnati Bengals, and the two sides are so far apart that the station's general manager told Smith it's highly unlikely an agreement will be reached by the Feb. 5 NBC Super Bowl broadcast.

There are 80,000 Time Warner customers in the Corpus Christi area, according to Smith.

In New York, a similar situation exists between Time Warner and the Madison Square Garden Network, which broadcasts New York area professional sports.

On Jan.1, when the two sides failed to reach an agreement, the station was pulled from the air, according to the New York Daily News. This shutdown, which continues, affects 1.3 million Time Warner customers in New York City, its northern suburbs and New Jersey.

According to Democrat and Chronicle.com, the failure of the two sides to reach a deal has prompted the New York Attorney General's Office to step in and attempt to broker a deal.

The negotiations seem to be similar across the board. The cable companies say the stations are asking for astronomical increases, and the stations say they only want pennies a day.

Back in Mohave County, Suddenlink customers can breathe a sigh of relief. Company spokesman Pete Abel said there are no impending negotiations in the near future that will affect Arizona.

"I'm told we do not expect any issues in the foreseeable future with TV station contracts," Abel wrote in an email to the Miner.

In Suddenlink's case, it's rare for a station to be pulled, but when it does happen it's not at the behest of the cable company but rather the TV stations, Abel said.

"We never remove major local broadcast stations," Abel wrote. "There was a situation four years ago, in which the owner of an NBC station in Texas forced us, by law, to remove their station. But that channel was back on the lineup within a few days."

Most but not all negotiations between TV stations and Suddenlink are done every three years, Abel said.

Although Suddenlink has been able to dodge the pull-my-station-from-your-lineup bullet, cable companies throughout America haven't been as lucky.

Phillip Napoli, a professor and department chair at Fordham University's Graduate School of Business, wrote in an opinion piece that appeared on TheHill.com that there were station blackouts in more than 30 markets in 2011.

"Earlier this year (2011), one broadcaster even pulled the plug on a local station in the Gulf Coast, depriving viewers of critical news and weather updates as Tropical Storm Lee approached thousands of homes," Napoli wrote. "These tactics raise significant questions as to whether the public interest is actually being considered and served."

Napoli focused his piece on broadcast stations.

Retransmission consent regulations mandated by the 1992 Cable Act opened the door for broadcast stations to negotiate fees charged to cable companies.

"Broadcasters argue that the fees are integral for maintaining local programming on the air. In fact, that was the whole basis for the legislation in the first place - broadcasters maintained that they were public trustees, serving local informational needs, and needed to maintain economic viability and wide accessibility," Napoli wrote. "Retransmission consent fees would provide these broadcasters the financial capacity and stability to continue providing the public with critical local programming."

The regulations are still in place 20 years later, and the fees have become a large source of revenue for broadcasters, writes Napoli. In 2006, broadcasters pocketed $216 million from fees, but in 2011 they took in approximately $1.3 billion, Napoli explained.

Since these fees were put in place to bolster the ability of broadcast stations to provide better local programming, one would think that's exactly what has happened.

But according to Napoli, it has not.

"A study by the FCC this year (2011) found that television stations provide on average less than 1.5 hours of local public affairs programming per week," Napoli wrote. "Commercial stations that provide absolutely no local news programming are increasingly prevalent, as are stations that merely replay the local news broadcasts of other stations in their market. ... No matter how it's measured, broadcaster commitment to localism through local news and information programming hasn't kept up with skyrocketing retransmission payments."

Napoli argues that retransmission fees go straight to the bottom line of the four major broadcast networks. For instance, he writes that NBC is seeking 50 percent of all retransmission consent revenues negotiated by its local affiliates.

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