McAdams On: Retransmission Perspective

AREA 51 —I am stuck on why the hue and cry for government intervention in the CBS-Time Warner Cable standoff. The impasse between the two gargantuan media corporations has persisted for nearly a month now. The two chieftains, TWC’s Glenn Britt and Les Moonves of CBS, are coming off like Frank and Jamie McCourt getting a divorce.

“Dear Les,” Britt wrote to the CBS boss on Aug. 5. “In the interest of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations…” To which “Les” replied: “Dear Glenn… What ‘new’ economics. You don’t call. You don’t write, and now this? How could you. What about Cabo? Was it all lies?”

The reason we know about these letters is because they accidentally were supplied to the Los Angeles Times, which needs fodder now that the McCourt theatrics have subsided. “Time Warner Cable Customers Fuming as CBS Blackout Drags On,” the latest headline reads. KCBS and KCAL are blacked out in Los Angeles. L.A. Dodgers fan Justin Bass tells the Times, “The whole system is broken. I have no recourse. I just have to sit here and take it.”

This, of course, is not true. Mr. Bass could trot down to one of the 1,000 or so Radio Shacks in Los Angeles, buy an antenna at a 25 percent discount, and get a picture with far more pixels than the one TWC squishes with a boot and sends out.

I don’t claim to be the sharpest knife in the drawer, but I am baffled at how this victim mentality persists to the point of a call for government intervention. For every other facet of American business there exists a national obsession to avert and avoid regulation at all costs. Why are we convinced that the public should dictate how pay TV is distributed?

There is a possibility that Mr. Bass lives in an apartment building that pumps in TWC and doesn’t allow satellite dishes. There’s a regulation preventing landlords from prohibiting satellite dishes, but it’s neither heavily advertised nor enforced. However, CBS has one of the most receivable broadcast signals in L.A., so an antenna is a likely option. TWC apparently believes as much, since it struck a deal with Best Buy to subsidize indoor antennas with $20 vouchers.

That seems like a dangerous game for TWC, given the phenomenon known as “cord cutting” has reached the status of being a phenomenon. Or maybe it’s TWC’s augury of things to come. Maybe TWC has no intention of striking a deal with CBS. Maybe CBS is the test case for a new cable business model.

Of all the pay carriers dominating U.S. distribution, TWC has been the most hardcore in retrans negotiations. The high-profile battles began in the late ’90s when TWC dropped ABC at the peak popularity of “Who Wants to Be a Millionaire.” TWC ran a blue screen in place of ABC during that spat.

By comparison, Comcast has been a quiet negotiator since before it purchased NBC. What have you read about Comcast lately—a little Internet-access throttling here, a little executive-celebrity spat there? When was the last time you read a letter in the Philadelphia Inquirer that Brian Roberts wrote to another executive? You did not, because he is not busy manipulating public opinion through the eagerly cooperative press. He is playing golf and having wine spritzers with the President of the United States.

Think what you will about the politics. If I were a business executive, I’d opt for golfing with the president over planting contrived letters in the newspaper. However, strategy is an interesting animal. With the aforementioned acceleration of cord-cutting and online consumption, the future of the cable business might very well become one entirely of data pipes. And they will be throttled—despite any net neutrality movement—because Brian Roberts golfs with presidents.

So Les and Glenn may very well go through with the divorce, and if so, there’s not a darn thing the government can or should do about it. It’s TV, for heaven’s sake. It’s not war in Syria or Miley Cyrus acting out. I can understand, however, that if Ms. Cyrus pulls a Cher on a New York construction site and it’s carried live only on CBS, then TWC subscribers will be completely out of touch on social media.

We certainly can’t have that.