Cable industry urges lawmakers to reform retransmission rules

Rutledge said broadcasters have grown bolder in recent years, demanding higher carriage fees and requiring cable providers to carry additional cable channels as part of negotiations. He also noted that broadcasters have threatened more than 30 blackouts since 2000.

"With government rules that protect broadcasters from the consequences of their pricing decisions, this may be a rational negotiating strategy, but over time it leads to substantially increased programming costs to the detriment of customers and other programmers without the legal leverage granted to broadcasters," Rutledge said.

In an op-ed published Wednesday, National Association of Broadcasters president and former Oregon Sen. Gordon Smith (R) took the opposing stance, arguing such negotiations are almost always successful unless one side has an expectation of government intervention.


"Recognizing the overwhelming historical success of retransmission consent, some pay-TV operators have undertaken a cynical campaign to manufacture market failure in the hope that Congress will rewrite established law — and tip the scales in pay TV’s favor," Smith said. "The government must resist this course of action."

Charles Segars, CEO of the independent national arts and culture television network Ovation, said the current rules overly favor broadcasters by forcing cable companies to devote more bandwidth and resources to their offerings, squeezing out independent programming. Segars asked lawmakers to adopt rules that would prevent broadcasters from requiring cable companies to carry their auxiliary networks.

"This is a call for a level playing field," Segars said. "If large broadcasters are allowed to use the airwaves owned by all Americans to extract payment for historically free TV service, then let's not allow them to bundle all their other services with it."

The lone dissenting voice on the panel will be Joseph Uva, president of Spanish language broadcaster Univision. Univision entered into retransmission consent negotiations for the first time in 2008 and has since negotiated more than 150 carriage agreements with cable, satellite and telephone companies without any signal disruptions.

Uva said the current system works because both sides have powerful motivation to reach an agreement: blackout cause cable providers to lose subscribers and damages the relationship between content providers and their advertisers.

"I certainly understand concerns by elected officials that their constituents not have to face even the temporary loss of a favorite station’s signal on cable or satellite," Uva said. "But we are very concerned that government mandates — such as requiring Univision to keep providing our programming to a distributor even where we failed to reach a deal — would distort the market by removing our distributors’ primary incentive to reach agreement."