Retransmission tug-of-war leaving you with questions? Vantage Point has solutions.
- How much will retransmission rates increase over the next 3 year cycle?
- What program tying of Big 4 Networks to new and growing multicast channels will we see?
- Is that “free multicast channel” really free? Are you prepared for trends in multicast?
- Is your video operation stable in a rapidly changing competitive environment?
- What options/restrictions will there be for video streaming, TV Everywhere, OTT options?
CATV Retransmission Consent & Must Carry Negotiations begin October 1, and new agreements must be in place by December 31, 2017.
What is CATV “Retransmission Consent and Must Carry?”
A provision of the Cable Television Act that requires cable operators to obtain permission from broadcasters before carrying that programming on their CATV system. The television broadcast station must elect which they will require. The current Must Carry/ Retransmission Consent Election period is completing its three year cycle that ends December 31, 2017. Therefore, these negotiations are for the next cycle, which is typically 3 years through December 31, 2020.
If elected by the broadcaster, “Must Carry” requires the local cable operator to carry the station’s signal in the provider’s program line-up on its off air channel assignment. The broadcaster is not allowed to request a “license fee” for the right to be carried by the system.
An election that is becoming far more prominent, “Retransmission Consent” allows the broadcasters to charge a fee to the cable operator to carry the station. With more video competition, broadcasters know that your system cannot afford to be without key local programming when your competitors carry the same station.
Must Carry/Retransmission Negotiation Steps:
- Broadcaster’s Must Carry or Retransmission Consent notification elections must be sent to operators by certified US Mail and postmarked on or before October 1, 2017.
- If no letter is received, it’s late, or an incorrect election or must carry is selected, the cable operator is required to carry as a “must carry” station with no fee for the next three year cycle.
- If the broadcaster elects “retransmission consent,” the cable operator will have to negotiate carriage terms and license fees in “good faith.”
- The operator should acknowledge the letter with an acceptance or a counter offer to the proposed terms and license fee.
- Negotiations continue until a deal is struck or the station cannot be carried and must be taken off the air at the end of the current agreement term.
- The election and any negotiation must be conducted in good faith, and concluded by December 31, 2017 or end of the current agreement term.
In the last three cycles, retransmission consent licensing fees have climbed dramatically. Many stations now charge rates that rival those of many of the highest rated cable networks. With programming costs skyrocketing, it is important to work to maintain retransmission fees that make sense and don’t abuse the goodwill of the subscriber. You need to educate your customers about this process and the high fees charged and be prepared to take some channels off the air if you cannot strike a reasonable deal.
VPS has staff, including two attorneys that have many years of experience in hard negotiations with this difficult process. Our results have been time proven and our rates are often less than the law firms that also do this work. We would be pleased to provide you with assistance in your retransmission consent negotiation efforts.
If you have any questions regarding retransmission consent or if you would like Vantage Point’s assistance in completing your negotiations this cycle please contact:
Doug Eidahl, J.D., VP of Legal & Regulatory at 605- 995-1750
Wendy Harper, Senior Analyst at 605-995-1756