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Retransmission Dispute Dominates House Video Marketplace Hearing

A House hearing held Sept. 11 that was intended to examine the need to update the laws governing broadcasting because of the changes in the video marketplace over the last 40 years, instead became a platform for both lawmakers and witnesses urging action to prevent another blackout of broadcast channels over cable systems as was the case in the recent CBS-Time Warner Cable retransmission-consent dispute.

House Communications and Technology Subcommittee Chairman Greg Walden (R-Ore.) opened the hearing -- Innovation Versus Regulation in the Video Marketplace -- by listing the three statues that govern broadcasting, as well as commenting how old each is. Those statues are the Telecommunications Act of 1996 (P.L. 104-104), the Cable Communications Act of 1984 (P.L. 98-549), and the Communications Act of 1934 (P.L. 73-416).

“In the on-demand world of the internet and mobility, the statues that govern the video marketplace are blissfully ignorant of the changes that have taken place around them,” Walden said.

The hearing was to examine the legal regimes governing how video content is regulated from creation through distribution and finally to consumption, asking one simple question: In a world where video technology is rapidly changing, are the laws keeping pace and fostering a free market? Walden said.

However, in her opening statement, subcommittee Ranking Member Anna Eshoo (D-Calif.), said the Time Warner Cable and CBS retransmission dispute, which resulted in a 32-day blackout of CBS programming in Dallas, Los Angeles and New York -- three of the nation’s five most populous television markets -- which occurred through August and ended on Sept 4, was “not the first time the issue [a blackout of broadcast programming] has occurred.”

Eshoo used the hearing to promote the draft-discussion bill, the proposed “Video CHOICE Act,” which she has been working on and floated among lawmakers and stakeholders, but has not yet introduced. The Video CHOICE Act “would eliminate television blackouts caused by retransmission consent disputes,” she said.

Because the document is a draft-discussion bill, Eshoo would not provide details as to the bill’s provision that would eliminate blackouts of television programs. However, she told Streaming Media, “Make no mistake, when there’s a blackout consumers, either across the country or in a particular market are being failed, and they are being screwed because they are still paying [for services] and not getting what they paid for.”

Eshoo added that the document will remain a draft-discussion bill as she works with stakeholders and other lawmakers -- including those on the other side of the aisle -- to achieve bipartisan support for the bill before it is introduced.

“We have a lot of work to do. I’m pleased with the response of the witnesses today who have read it and said it is something they could support,” Eshoo said. “When we’re well prepared, I’ll drop the bill.”

Among those witnesses was James Campbell, the vice president of regulatory and legislative affairs in the Midwest Region for CenturyLink Inc., a provider of internet, television and voice services. The existing legislation favors broadcasters because when these rules were enacted they were designed to protect broadcasters from a single cable provider, he said.

“Now that there’s multiple providers, those same rules that were being used as a shield are now being used as a sword against new entrants like CenturyLink,” Campbell said. “What’s needed is to create an environment where both sides have an equal position at the bargaining table,” he added.

However, Edward Munson, the vice president and general manager of KPHO-TV in Phoenix, Arizona, disputed that the retransmission system is broken and needs to be fixed.

“I have personally been involved in many successful carriage negotiations with companies like CenturyLink,” Munson said. Retransmission deals “get done all the time. But of course, you don’t hear about the ones that go smoothly, you hear about the handful that don’t,” he added.

Over the last two years, in the few instances where agreements have not been reached, 89 percent of the disputes have involved Time Warner Cable, Dish, or DirecTV, according to Munson.

“That’s nearly nine out of every 10 disputes. What that suggests to me is there is not a problem with the process, but there’s a problem with the players,” Munson said.

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