07.14.2008 09:36 AM
Disney will not charge for carriage on small cable systems

The Walt Disney Company has announced that it will grant no-charge retransmission consent agreements to 90 small cable operators in its 10 ABC-owned markets. That amounts to about 80 percent of the operators in those markets.

The cable operators will get three years’ worth of carriage free from 2009-2011, with no requirement that they carry any of Disney’s affiliated networks.

The stations involved are WABC-TV, New York; KABC-TV, Los Angeles; WLS-TV, Chicago; WPVI-TV, Philadelphia; KGO-TV, San Francisco; KTRK-TV, Houston; WTVD-TV, Raleigh-Durham, NC; KFSN-TV, Fresno, CA; WJRT-TV, Flint, MI; and WTVG-TV, Toledo, OH.

The deal does not cover any of the Disney cable networks, such as ESPN, which the operators will have to negotiate payment for separately.

The American Cable Association, who asked for retransmission relief for its members, saw Disney’s move as only a small step. “A major broadcaster and programmer has finally admitted that the retransmission consent market is broken and does not work the way Congress intended. It is about time,” Matt Polka, ACA president, said, adding that the offer does little to change the broken retransmission consent regulations.

“[Disney] should not be given a free pass on its ongoing market abuse against other small and midsized cable operators that will be still charged discriminatory rates,” Polka continued. “In Disney’s mind, today’s announcement may be an olive branch to smaller operators, but this is far too little relief for far too few operators.”

In a separate issue, the ACA asked the FCC to impose a quiet period between broadcasters and cable operators during the coming round of retransmission consent negotiations to prevent public confusion surrounding the digital TV transition in February 2009.

Citing the confusion and public harm that would be done if operators are forced to drop a broadcaster’s signal in such close proximity to the digital TV transition set for Feb. 17, the ACA requested a “modest quiet period” that would “absent a new retransmission consent agreement between the parties, require broadcasters and cable operators to maintain the status quo regarding the carriage of retransmission consent signals for a short period of time.” The proposed quiet period would maintain that status quo until May 31, 2009, to provide consumers with an adequate adjustment period.

Existing three-year retransmission consent agreements between cable operators and broadcasters are generally set to expire by Dec. 31, 2008, and independent cable operators are expecting to face difficult and potentially contentious negotiations with broadcasters who commonly charge small cable operators per subscriber fees more than 20 percent higher than larger operators for the same signals without any justification.

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