Top TV Execs Debate Retransmission Consent Changes in D.C.

Sen. John Kerry led session that focused on the role of the FCC and the current business challenges of content and distribution companies.

NEW YORK -- The debate over changes to retransmission consent rules took over Capitol Hill on Wednesday as Sen. John Kerry suggested more transparency may be the best way to help avoid programming disputes that lead to blackouts without wielding an overly "heavy hand of government."

The role of the FCC and the current business challenges of content and distribution companies were in focus during the afternoon session of the Senate Communications subcommittee, which Kerry, D-Mass., chairs.

News Corp. deputy chairman Chase Carey said high-profile sports programs from the likes of the NFL and hit shows like American Idol  must somehow be financed by broadcast networks with the help of retrans fees. They might otherwise migrate to cable.

"I think our survival would certainly be threatened" if there was no or less money coming in from retrans fees as an additional revenue source to advertising dollars, Carey said when asked how key retrans money is. "It enables us to be competitive."

Kerry pointed out that broadcasters are using spectrum provided by the government. "That's a huge subsidy," he said.

The two briefly discussed Carey's former role as CEO of satellite TV giant DirecTV, where he was pushing for low fees for the right to carry networks.

"I sat on the other side," Carey said. "That was my job."

If he were still at DirecTV, "I would be pushing back" at fee demands from programmers, he said. However, he also suggested that TV distributors were in a good position. "They are not fighting for survival," he said.

Before the hearing, Kerry said that he fears that without a new process to handle impasses and adequate FCC oversight, "more fights and disruptions of service are what people will have to look forward to."

He added, "Prices for consumers will rise, and independent programming will get crowded out."

The hearing also included Univision CEO Joe Uva, Cablevision COO Tom Rutledge and Time Warner Cable CEO Glenn Britt. Most of the industry folks testifying agreed that the FCC has powers it can use in retrans disputes. Britt said the agency seems to have chosen not to use them.

In opening comments, Sen. Jay Rockefeller, D-W.Va., decried high cable fees and seemed in favor of a la carte offers, wondering why consumers must order so many networks when they typically watch only a few.

"We need slimmed-down channel packages," he said.

Returning to the issue of retrans, Rockefeller warned that he isn't looking for a new retrans system that simply referees money wars between corporate entities. "If you fail to fix this situation," he told the hearing, "we're going to fix it for you."

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