Kerry Waffles, Retrans Burns

by David Goetzl, Dec 17, 2010, 12:45 PM

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Massachusetts Sen. John Kerry was branded a flip-flopper during his 2004 presidential run. Notably, there was his infamous comment on major funding for U.S troops: "I actually did vote for the $87 billion before I voted against it."

Once again, he's displayed a certain wishy-washy attitude as he leads Senate oversight of the spreading carriage disputes between station owners and pay-TV distributors. It's an issue that threatens to impact broadcast TV for years to come. Kerry had a hammer, then simply put it back in the tool box.

Meanwhile, Sinclair and Time Warner Cable are locked in an increasingly contentious battle. And distributors are raising prices to recoup money they say the disputes are costing them.

When Kerry held hearings this fall after the brutal Cablevision-Fox standoff that had the World Series off the air in New York, he demonstrated toughness. He showed a commitment to preventing further blackouts. The darkness occurs after a station and operator can't agree on how much the operator will pay to offer the station, which can leave consumers helpless in the middle.

At different points, Kerry asked News Corp.'s Chase Carey and Time Warner Cable's Glenn Britt financial questions about compensation they would be mortified to answer in public.

Carey said releasing details would not be "constructive," while indicating the matters fell under a private business umbrella. Britt said he didn't have the ESPN and Fox figures in front of him, but would be happy to provide answers later.

Kerry, the chair of the Senate communications subcommittee, then suggested he might request that information. That was a threat and not a veiled one. It was a further warning how serious he was about urging parties to think twice before letting "retransmission consent" disputes escalate. Still, he said his preference was not to get overly involved in regulating negotiations. He wanted to allow the marketplace to work, even as "consumers keep getting crunched in the middle."

But he had the option of pursuing legislation, having sent a draft to the FCC for review, which would have unnerved the parties. Yet he's taken the cudgel away.

The FCC said it would help with a framework to better resolve "retrans" disputes and prevent blackouts, Kerry issued a statement: "With the FCC taking action and their experts focused on a solution, there's no need to introduce legislation at this time," adding: "I will work with the FCC and appreciate the agency listening and acting to foster a better dialogue and a more rational system."

It's fine for Kerry to allow the FCC process to play out, but the agency is notoriously slow. Taking the legislative option off the table was a curious and rash decision.

A Republican-controlled House might make passage of a bill tougher, but not if GOP House members have phones ringing off the hook next month if ABC and CBS stations are taken off the air.

Sinclair is locked in a dispute with both TWC and Bright House Networks that could result in a lockdown Jan. 1. Through a side deal, Fox programming will remain on the air even if Sinclair stations go dark.

The dispute will get resolved way before the FCC acts. But Kerry, a Democrat and would-be consumer advocate, should not have punted the ball to the agency so swiftly.

Service providers are already raising prices to compensate for the added costs of paying to offer local stations. In October in most markets, Charter Communications began charging customers a "broadcast TV surcharge" that's around $1. Charter says the fee is "a pass through reflecting" the new costs.

When Cablevision settled with Fox, it indicated consumers would pay more for the network, though not as much as they would have if Cablevision had not taken a hard line.

Last week, DirecTV CFO Patrick Doyle said higher costs for local stations and regional sports networks will lead to increased prices for its customers and the industry at large. "It's important that the industry pass through the cost of this higher programming that we're seeing," he said.

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