After years of eschewing the public spotlight, Dish Network Chairman Charlie Ergen showed today at a congressional hearing that he hasn’t lost his keen debating skills. He skewered broadcast stations for acting as “a government-sponsored monopoly” when demanding higher fees from pay TV providers under the federal retransmission consent rules — and withdrawing programming when negotiations break down. “The problem is only getting worse — with more blackouts and more broadcaster abuses,” he told the House Energy and Commerce Subcommittee on Communications and Technology’s hearing today on the Future of Video. “From where we sit, the broadcasters cling to the status quo instead of meeting consumer demand and embracing new technologies and business models.” Ergen added that while stations demand payments for pay TV carriage of their over-the-air signals, their commitment to localism “has gone down” — for example many stations have begun to share newscasts. “The retransmission consent regime is a prime example of an outdated government policy in need of an overhaul by Congress and the FCC.” One way to fix things, he says, would be to allow pay TV companies to import signals from network affiliates in other markets when negotiations with the local station break down. “Then you have the free market system working.”
But Hearst Television CEO David Barrett, representing the National Association of Broadcasters, says Ergen’s proposal would hurt consumers. “A 21st century media company today needs a dual revenue stream.” And the money broadcasters collect fuels local services as well as multi-cast channels. “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,” he says. Barrett added that it’s bogus to blame broadcasters for the rising prices that consumers pay for pay TV. “Cable price increases have consistently outpaced inflation for 11 of the last 12 years,” he says. Operators this year will pay $2B to broadcasters, but $29B to basic cable channels. “This is even more confounding when you consider broadcast ratings are six times higher than cable. In fact, approximately 96% of the top 100 shows are on broadcast television. Clearly, retrans payments are not the driver of increasing cable bills.”
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