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Cable-TV Bosses Slam “Extortive” US Networks

News, 08 May 2003


Cable-TV executives are calling on Congress to tackle “extortive” demands from networks that raise the cost to subscribers.

Bosses made the demands in a hearing of the Senate Commerce Committee, chaired by John McCain (Republican, Arizona), a past critic of above-inflation cable price rises. Subscription fees have rocketed nearly 50% since regulations were relaxed in 1996.

James Robbins, president/ceo of Cox Communications, claimed that existing rules obliging cable firms to transmit all local signals have handed television networks and their local affiliates too much bargaining power.

As a result, he argues, networks can demand higher prices for programming, with the rising wholesale cost passed on to the consumer.

Networks have been accused in the past of forcing cable firms into accepting ‘take it or leave it’ deals that tie carriage of local stations to other cable channels. Cablevision Systems chairman Charles Dolan told the Committee that “unwanted programming is being forced into the home, particularly sports programming,” forcing up bills.

Cable executives are worried that the Federal Communications Commission’s proposals to relax media ownership laws further will hand big media conglomerates even more power.

However, cable operators are hardly whiter than white themselves, according to YES Network boss Leo Hindery. “I find it beyond irresponsible for cable industry leaders to blame programmers for their often excessive rate increases,” he told the Committee.

Hindery pointed out that the cable industry is no stranger to consolidation, with just seven firms reaching 90% of all customers. “I no longer believe additional legislation is uncalled for,” he continued. Program access “should be regulated.”

Data sourced from: The Wall Street Journal Online; additional content by WARC staff