As cable and other operators grapple with carriage payments to local stations, there is a path they could take to reduce costs -- although apparently that would bring major legal fees. On paper, it’s rather simple: install an over-the-air antenna in a home for customers to get the broadcast channels as part of the overall service with the cable networks.
Asked about the prospect in an investor call Thursday, Time Warner Cable CEO Glenn Britt said: “Interesting question, and it's a very complex legal issue, actually. There's nothing stopping consumers from having an antenna. But whether we provide that and if it's part of our cable system, as a legal matter, is a very complicated thing. It is something we look at a great deal.”
Even outside the courts, Congress may not embrace an initiative that could have such a negative impact on local broadcasters, which are counting on retransmission consent payments to give them a dual-revenue stream.
The broadcasters are represented by the National Association of Broadcasters before Congress, which took the opportunity Friday to insinuate that Time Warner Cable is using the payments to stations as an excuse for raising customer prices.
In a statement, NAB Executive Vice President of Communications Dennis Wharton attempted to portray TWC as a wealthy company, where retrans payments are a small portion of programming expenses.
The NAB said TWC posted annual profits of $1.3 billion, although that was the figure for 2010. In 2011, it was $1.7 billion.
Wharton stated that “it's time for pay TV's poster child for skyrocketing rates to come clean on retransmission consent. Time Warner and its front group the American Television Alliance claims that broadcast retransmission consent fees are responsible for escalating cable rates … The fact is that local TV station carriage fees account for less than 1% of the cost of a monthly cable bill.”
The American Television Alliance is a group of operators and cable networks looking to advance the cause that broadcasters are overly responsible for blackouts during carriage disputes.
A recent dispute had Sunbeam stations off DirecTV. and with the prospect of DirecTV customers in Boston missing the Super Bowl, Sen. John Kerry became involved and the matter was resolved.