HUNT VALLEY, MD.: Suburban Baltimore broadcaster Sinclair today fired a shot at Mediacom, even though the two resolved a retransmission dispute last week. Sinclair released a copy of a letter sent on Jan. 8 to Sen. John Kerry (D-Mass.), who weighed in on the acrimonious disagreement. Sinclair and the Middletown, N.Y., cable company were locked in a stand-off over retransmission fees that threatened to end with Sinclair taking its stations off Mediacom systems when the contract expired New Year’s Eve. At one point, Mediacom wrote to Kerry, saying broadcasters were engaged in “economic blackmail” that would result in a $6 billion tax on consumers.
Kerry, in a publicized letter, told the companies to resolve the conflict before football fans were deprived on game days. An eight-day extension was struck and the stand-off ended last week.
David Smith, president and CEO of Sinclair, urged Sen. Kerry to allow the market to work on its own.
“Although we share your concern for the public interest and are pleased to have reached agreement with Mediacom, I trust you can see through Mediacom’s blustery rhetoric to understand that their true interest lies not in serving the public interest, but rather in maximizing their profits by receiving government intervention to avoid paying fair, market-driven consideration for the right to retransmit broadcast television programming,” Smith wrote.
“Mediacom’s argument essentially boils down to a self-serving claim that because local broadcast stations are free over-the-air this should give a private, for profit company like Mediacom a special right to use this programming without paying an appropriate fee to do so. Were this the case, video bootleggers could simply record popular broadcast programming over-the-air onto DVDs and sell boxed sets of the entire season at prices far below the selling price of those who actually pay to acquire the valuable rights to sell such programming.”
Smith said that because broadcast content is provided free to the public over-the-air does not mean it should also be free to a commercial enterprise for the purpose of making a profit. The 1992 retransmission law was designed to assure that wouldn’t happen, he said.
“The promise of the 1992 retransmission consent legislation--that broadcasters would receive fair compensation--has yet to be fully realized, but we believe the free market is finally beginning to move in that direction. The recent success of Fox in receiving compensation from Time Warner Cable for its highly rated stations, coupled with the decision by Cablevision to remove The Food Network and HGTV from its line-up rather than pay exorbitant price increases for these low-rated programming services reflect a movement toward a resetting of program acquisition fees consistent with consumer demand.”
Smith concluded that he would be happy meet with Kerry regarding retransmission.
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