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Hearst Television CEO tells Congress retransmission fees are not the same as cable TV subscription increases

Testifying before the House of Representatives, Hearst Television president and CEO David Barrett disputed cable industry claims that subscriber costs are rising due to broadcaster retransmission fees.

“History shows just the opposite,” Barrett told the Energy and Commerce Subcommittee on Communications and Technology last week. “Cable price increases have consistently outpaced inflation for 11 of the last 12 years.”

Barrett, appearing at a hearing on “The Future of Video,” used a chart to outline the history of cable price increases. “In actuality, it is the cable networks themselves that have been collecting the vast majority of carriage fees. This chart from SNL Kagan shows the disparity in fees paid to basic cable networks compared to the total paid for broadcaster retransmission,” he said.

“In 2012, cable paid broadcasters $2 billion in retrans, but paid basic cable networks almost $29 billion—that’s over 15 times more. This is even more confounding when you consider broadcast ratings are six times higher than cable.”

Barrett, whose testimony was distributed by the NAB, said approximately 96 percent of the top 100 shows are on broadcast television. “Clearly, retrans payments are not the driver of increasing cable bills,” he said.

Noting that the FCC is currently considering the question of “what is a multichannel video program distributor?,” Barrett said the seemingly simple question has far reaching implications for broadcasters. “Who has program access? Who pays retransmission consent? We believe it makes sense for the existing retransmission consent and exclusivity rules to be applicable to new entrants,” he said.

“As an industry that creates content, or acquires the rights to content, it is imperative that broadcasters have the right to negotiate over how our content is distributed. Congress should reject any erosion of the bedrock principles of retransmission consent and market exclusivity because they are essential to the system of broadcasting,” Barrett said.