October 1999
"Priming The Pump": The Role of Retransmission Consent in the Transition To Digital Television
By Stuart N. Brotman

III. RETRANSMISSION CONSENT'S TRACK RECORD

The attractiveness of broadcast programming to cable subscribers always has been the basis for making retransmission consent a successful market mechanism. Following the enactment of the retransmission consent provisions of the Cable Consumer Protection and Competition Act of 1992 and the promulgation of retransmission consent regulations by the FCC, ⁵ over 80 percent of commercial broadcast television stations and 90 percent of network affiliates opted to negotiate retransmission consent agreements. ⁶

According to a survey released by the Television Bureau of Advertising and the National Association of Broadcasters, by October 6, 1993 - the FCC's deadline for cable carriage deals to be completed - 92 percent of all TV stations continued to reach at least 99 percent of their cable households, and 97 percent reached more than 90 percent of their cable households. ⁷ In a world where retransmission consent was an important means for broadcasters to achieve cable carriage, virtually all such stations continued to enjoy cable carriage.

John Siegel, Senior Vice President of Chris-Craft Broadcasting commented, "We feel very good about our decisions and our agreements that we have entered into. The time has come for us to figure out ways to work with cable companies." ⁸ John Howell III, General Manager of Cox Broadcasting's WPXI-TV in Pittsburgh, found retransmission consent to be a "good deal in the short term and a terrific deal in the long term." ⁹

On the cable side, William Quinn, Cablevision Systems' President of Cable Operations, said that "offering broadcasters a free channel and a package of free ad time is an innovative idea that signals our willingness to cooperate with broadcasters in a creative fashion." He noted that "broadcasters and cable have a responsibility to work together to make sure decision[s] . . . are in the best interests of consumers." ¹⁰

By 1996, when the second round of retransmission consent deals commenced, both broadcasters and cable operators were able to build upon their prior experiences in crafting new deals with greater efficiency. The resulting favorable outcomes to both sides, and to consumers, demonstrated the durability of relying on marketplace forces to create solutions that reflected consumer preferences. Once again, eight out of every ten commercial television stations opted to pursue retransmission consent agreements. ¹¹

¹¹ James M. Burger, Esq. and Todd Gray, Esq. The Effect of DTV on Business Negotiations, Digital Television and the Law, April 1999, available at www.digitaltelevision.com/law499.shtml.