Cable Gives the Networks a Little Lift

In “fX Affects C-SPAN’s Viewership” (May 30), Jane Hall quotes C-SPAN’s Brian Lamb as saying: “I have nothing against fX, but the government has given the broadcast networks a powerful jump-start with their new cable networks, an advantage that no one else has.” In reality, this advantage was given to the networks not by the government but by the cable industry itself.

For decades, cable TV systems have been profiting from the resale of network affiliate and local over-the-air signals. The retransmission consent rules issued by the Federal Communications Commission as the result of the Cable TV Act gave cable operators a choice in how to deal with stations that now had the right to be compensated for the sale of their signal. Cable operators could either negotiate fair compensation for the retransmission of these signals or not carry them.

The cable industry unilaterally refused cash payments. The uniformity of these refusals was sufficient to gain the attention of Sen. Daniel K. Inouye (D-Hawaii), who asked the Justice Department and the Federal Trade Commission to look into possible collusion. Cable operators insisted that their decisions were reached independently, without consulting or contacting other operators.

They now had a dilemma. They had refused to negotiate a cash payment but could not afford to simply drop the signal. Offering guaranteed coverage of the networks’ new cable channels was now the only option remaining to the cable industry. Deals were soon completed for fX (Fox), ESPN-2 (ABC/Hearst) and America’s Talking (NBC). At the same time, a public relations campaign was started to inform consumers of the great job their local cable company had done in protecting them from network greed. Everyone was a winner; no one was a loser.

Well, the other shoe has dropped. The cable operators knew a year ago that sooner or later they would have to honor their agreements and add these new channels, with, in many cases, higher costs.

The fact that the cable industry chooses to blame the government for their dilemma does not alter the fact that they had an alternative open to them a year ago. Instead, they chose to commit to new channels at a time when channel space was at a premium. Brian Lamb and his viewers are now suffering the consequences of that decision.

ERIC KNIPPERT

Encinitas