Rocco Commisso, the head of cable company Mediacom, fired off a letter to FCC Chairman Julius Genachowski wondering why the Commission has failed to protect consumers in the form of keeping his own company’s programming expenses low. NAB’s Dennis Wharton fired back, saying that broadcast program prices are a tiny percentage of cable’s current income.
“Mediacom’s sudden conversion to consumer advocate strains the bounds of credibility,” said Wharton. “For years, cable operators have hiked subscription fees more than double the annual rate of inflation, yet programming costs account for only a fraction of their expenses. The truth is that retransmission consent fees account for only two-tenths of one percent of cable revenues today, and according to a recent study, analysts predict they will never rise above one percent.”
Wharton added, “Broadcasters are committed to negotiating fair carriage rights reflective of the value of our most-watched programming, the proceeds of which will allow local stations to continue delivering high-quality entertainment, news, sports and lifeline weather alerts that serve our diverse communities.”
Commisso accused the FCC of falling down on its job to protect consumers, then proceeded to provide a laundry list of complaints that enumerated many costs of doing business he believes the Commission should be doing something about.
RBR-TVBR observation: We have seen cable companies strong-arm program producers when they have the chance – recent battles by independents like The Tennis Channel, the NFL Channel and Bloomberg come to mind – making Commisso’s nakedly self-serving plea for the FCC to come to its aid in what should be simple free market business transactions simply stunning.
Commisso was looking for help not just against broadcasters but against all program sources, as if FCC stands for Federal Cable Commission, an organization chartered to protect cable companies from all competitors.
Even if one believes the FCC should do something to honor Commisso’s request, it is extremely doubtful it CAN do anything.
And we firmly believe that if it does indeed do something, it should do something that ensures the robust health of local broadcast television, which not only enable’s Commisso’s company to sell subscriptions, but is also the primary source of almost all local programming available on MVPDs, making their carriage the MVPD’s primary action in service of the public interest.
