Viewers in middle of cable TV battle

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TV watchers in Maine are finding themselves caught in the middle of a struggle between local network affiliates and cable companies.

This battle of wills is part of the fallout from the Cable Act of 1992. Intended to protect the interest of cable subscribers, the legislation instead may result in the loss of local network affiliates from cable packages.

Under the bill, television stations (excluding so-called “superstations” like WTBS) had to choose one of two options concerning the carrying of their signals by cable companies.

The first option, “must carry,” meant that the station would allow its programming to be carried free of charge, although the station could designate its preferred spot on the dial. The second choice, “retransmission consent,” meant that the station chose to negotiate some kind of compensation for rebroadcast of its signal.

Bangor stations WLBZ (Channel 2) and WABI (Channel 5), Portland station WPXT (Channel 51), and Boston station WSBK (Channel 38) have all requested retransmission consent status. Bangor station WVII (Channel 7) went for must carry status on all cable systems except Cablevision of Bangor, with which WVII chose retransmission consent. Maine Public Television is a non-commercial entity, so it’s not a party to the law.

This means the future of Bangor’s local stations on cable is up for negotiation.

Peter Orne, WVII’s owner, said he chose to go “must carry” to keep his signal going strong throughout the region.

“Most of the systems help us reach out behind our normal system capacity with greater clarity,” he said.

Cable companies pay a per-subscriber/per-month fee for satellite cable channels, such as ESPN or CNN. Network affiliates are seeking the same kind of deal, after cable has carried broadcast signals for free since its inception 30 years ago. The local broadcast signals must be part of the basic cable package if agreements are reached.

“For 30 years, cable has processed our signal and received payment for it,” said Marilyn Jaffe, WABI’s general manager. “We’re not looking for a lot of money. We just want to pave the way for the future.”

Both Jaffe and Jeffrey Marks, WLBZ’s general manager, said that most cable systems have been cooperative and many have already negotiated monetary settlements.

But the big holdout remains Cablevision of Bangor. Its parent company in Long Island has a firm policy of not paying cash as part of settlements.

A Cablevision spokesman said this policy stems from a philosophical perspective.

“Congress had given broadcast TV to the public as a free medium, unlike in Britain, where citizens pay an antenna tax,” said Elizabeth Losinski, director of regulatory affairs for Cablevision. “Cable and cable programming were never given as a broadcast-free medium. Now, under this new law, broadcast TV can assess an antenna tax to cable subscribers, with the cable company as the collecting agency.”

Losinski said the situation is inequitable, with a person with cable paying to receive a channel, while his neighbor with an antenna doesn’t pay.

Bill Fay, general manager for Cablevision of Bangor, added that cable subscribers aren’t primarily interested in the local stations.

“Most people have cable for the cable programming, not for the broadcast channels,” he said.

Jaffe disagreed with Fay’s assessment.

“True, the signal off the air is free,” she said. “But 80 percent of what people watch is broadcast channels, and cable has taken advantage of that situation in the past.”

Under the cable act, rates will be adjusted as of Sept. 1, with a ceiling put in place to keep rates from rising above a certain point the first year. Subscribers with Cablevision, which is bought by 52 percent of the homes it is available to in 26 towns, could see any kind of change with the bill, depending on the number of services and equipment they buy and number of sets wired.

Cablevision maintains it is looking out for its customer. The formula used by the Federal Communication Commission to figure cable rates results in such external costs as retransmission consent fees and programming fee increases to be passed on directly to the consumer, said Losinski.

“It’s not a matter of do we pay,” she said. “It’s a matter of does the customer pay. There’s no financial win for the cable operator.”

WLBZ’s Marks disagrees with that approach.

“A few pennies in program costs won’t sink any company,” he said. “They don’t have to pass on costs. To lay the increase to consumers on one cost factor isn’t leveling with people.”

Maine offers a unique setting for these negotiations. Unlike in more urban areas, there is no overlap among network affiliates, so cable companies can’t run a “must carry” station in place of one seeking compensation. Likewise, market exclusivity precludes Cablevision from importing network signals from other markets.

For now, Cablevision’s 25,751 subscribers are in limbo as negotiations between the two sides have been sporadic at best. Marks had his one and only meeting with Fay on July 13. Talks between Jaffe and Fay have been ongoing.

Orne has yet to schedule a meeting with Cablevision, reasoning that, “the longer people have to live with the reality of the law, the more reasonable negotiators will be.”

While the two sides have cranked up their information campaigns through TV and print, each is waiting for the other to come up with creative, nonmonetary forms of compensation. Fay said that Cablevision was willing to set aside one additional channel for the three local broadcasters to share for community service programming, and advertising on other cable channels with which to promote that channel. Losinski added that advertising-based deals are another possibility.

“We’re open to discussion,” Fay said. “We’ll listen to their ideas.”

Marks had a differing view on Cablevision’s negotiating tact.

“They won’t set up a meeting, they’re telling subscribers misinformation, and they won’t put anything on the table,” he said. “It’s difficult when you’re treated with dismissal.”

The stations and cable companies have until Oct. 6 to reach some form of agreement. But even if the three local stations are bumped off the cable, TV viewers will have options. Two-TV families could use one television with cable and the other with an antenna to watch network programming. Another choice could be an A-B switch on a single TV, which would allow viewers to move back and forth between cable and antenna.

If the three local channels are lost, Cablevision plans to replace them with other satellite channels, although Losinski admits that could result in rates increasing in the future.

Losinski said Cablevision could well lose subscribers if the stations are pulled.

“To not have them on can injure our business,” she said. “We understand it is of value to our subscribers.”

WVII’s Orne seconded that thought.

“There’s not a lot of people willing to pay $30 for everything except what they watch,” he said.

All three parties in the equation could come out poorer if no agreement is reached, especially the consumer.

“It’s an inconvenience for people,” said Jaffe. “Life is difficult enough without having to worry about your TV signals.”