"A plague o' both your houses! 'Zounds, a dog, a rat, a mouse, a cat, to scratch a man to death! a braggart, a rogue, a villain, that fights by the book of
arithmetic!"
Graph courtesy of Ben Bagdikian, "The New Media Monopoly"(Beacon Press: 2004) via Iowans for Better Local TV
Pensacola Beach and Gulf Breeze cable subscribers awoke Saturday morning to discover that local channel 3 (WEAR-TV), an ABC affiliate and the only local VHF broadcaster in Pensacola, has been taken off Mediacom's cable channel list. As of early Sunday, it remains unavailable to the (comparatively few) cable subscribers in Escambia and south Santa Rosa counties.
Mediacom doesn't serve the mainland city of Pensacola itself, and therefore the local impact may appear limited for now. But the over-arching issue isn't confined to our small beach community or nearby Gulf Breeze.
Nationwide, as many as 700,000 Mediacom cable subscribers are affected. As Lewis Cooper reported for the PNJ yesterday.
Who's Affected?
Mediacom doesn't serve the mainland city of Pensacola itself, and therefore the local impact may appear limited for now. But the over-arching issue isn't confined to our small beach community or nearby Gulf Breeze.
Nationwide, as many as 700,000 Mediacom cable subscribers are affected. As Lewis Cooper reported for the PNJ yesterday.
In addition to WEAR and WFGX, there are a number of stations across the country that are owned by Sinclair [Brocasting Com.] in markets where Mediacom is the cable provider, including stations in Des Moines, Iowa; Cedar Rapids, Iowa; Peoria, Ill.; Asheville, N.C.; Lexington, Ky.; Madison, Wis.; Nashville, Tenn.; Minneapolis. Minn.; Cape Girardeau, Mo.; Springfield, Ill.; St. Louis, Mo.; Tallahassee; Birmingham, Ala.; Norfolk, Va., and Milwaukee.
According to Cooper, "WEAR will be replaced with Starz Kids and Family, a network similar to the Disney Channel... ."
A cynic might say no one will notice the difference; not even during channel 3's execrable eveningcommercial fest newscasts where, at last count, the minutes devoted to ads outnumber the minutes devoted to news in each 30-minute program.
Mediacom has argued, with considerable justification, that if Sinclair wins this struggle it will set a negotiating precedent of sorts that will affect over seventy million more cable households, not just those served by Mediacom. Sinclair most assuredly will serve the same demands on every other cable company in the nation's major markets where it operates a broadcast station.
Indeed, Sinclair already has set its sites on cable giants Comcast and Time-Warner for repeat performances. Cox Cable, which serves Pensacola, can't be far behind.
Essentially, this means that virtually every cable system in Florida and the nation, for that matter, has a stake in the outcome of the Sinclair-Mediacom war.
Under Sinclair's ownership, WEAR-TV has been steadily turned into one of the worst network television affiliates in the nation. If it weren't for the ABC network programs themselves, which thankfully Sinclair has no hand in creating, it's unlikely anyone would watch the station. Local programming is a bad joke. Even the station's news (and until recently its editorials) is largely phony-local, greatly dependent on well-camouflaged file stories arranged by Sinclair's Maryland headquarters.
As for Mediacom, like most cable franchises it enjoys a monopoly in the local service area -- and the dismal quality of its customer service and the near-total absence of local public access channel programming for Pensacola Beach and Gulf Breeze shows it. Or, at least it did enjoy a monopoly until thousands of locals began switching to satellite TV after Hurricane Ivan.
Still, as such things go Mediacom actually is one of the smaller players in the cable industry. It's ranked 8th in size among all cable companies. Unlike Sinclair, it is purely a carrier of others' signals. Also, unlike Sinclair it doesn't force its political views, whatever they may be, onto viewers.
So, we suppose, if we were forced by threat of losing Jim Leherer's News Hour to take sides, we'd probably sign up for a surge with Mediacom.
Most fans of Desperate Housewives or Boston Legal don't realize it, but the really bad actors in all of this are the seven Federal Communications Commissioners and the presidents who have appointed them over the past three decades.
The immediate Sinclair-Mediacom dispute itself isn't complicated. It's about money and power. What the public is seeing now is just the tip-top of a giant iceberg known as media concentration.
As the chart at the top of this post shows, an oligopoly of only six media conglomerate giants now has a stranglehold on about 80% of all of America's mass media sources for news and information -- and much of our entertainment -- whether via TV, radio, newspapers, magazines, or the Internet. This alarming state of affairs is the product of three decades of consciously neglectful antitrust enforcement and rash, anti-consumer policies pursued by a bought-and-paid-for Congress and every presidential administration since the Fairness Doctrine was permanently abolished during Ronald Reagan's presidency. (For an abbreviated timeline of key events in media consolidation, see this summary.)
Since the early 1970s, the broadcaster-friendly Federal Communications Commission has enforced regulations stipulating that local cable companies "must carry" local over-the-air broadcast stations for free. The "must carry" rules initially were a government gift to local broadcasters who feared losing ad revenue to distant, new super-channel competitors like CNN, ESPN, WGN, etc.
However, as cable subscriptions mounted and broadcasters felt the competition, the FCC intervened again to revise the "must carry" rules and make them even more broadcaster-friendly. In 1994 new regulations allowed those broadcasters who presumably have no fear of losing ad revenue the option of withholding re-transmission consent unless local cable providers agree to pay them a fee.
Thus, under current law the "must carry" option rests exclusively with the local over-the-air broadcast station, in this case Sinclair Broadcasting, the distant owner of Pensacola Channel 3. It can either insist on carriage by the cable company for free, or it can demand, if it dares, payment for retransmission consent.
We say 'if it dares' because if the over-the-air broadcaster demands payment, as Sinclair has done, and the cable company can't or won't agree to the price the cable system then is liberated from the "must carry" obligation as to that local station.
That's what happened as of midnight Saturday to all Mediacom subscribers when Sinclair Broadcasting rejected Mediacom's eleventh-hour offer for binding arbitration. Only public outcries for another fix of Desperate Housewives can rescue Sinclair Broadcasting from the greedy corner into which it has painted itself.
Congress recently mandated that the FCC re-study the non-duplication rules. It has been said that this was partly out of a concern that local broadcasters like Sinclair might do exactly what Sinclair is doing now: misuse the protections the FCC has given them to coerce cable companies into paying exorbitant fees to comply with the "must carry" rule.
But FCC commissioners appointed by George W. Bush have been notorious for encouraging more, not less, media consolidation while protecting the interests of the largest meda-media companies. Absent a dramatic change in federal campaign financing for congressional candidates -- as well as the White House occupant who appoints FCC commissioners -- no "study" much less meaningful reform in "must carry" or "non-duplication" rules is likely in the lifetime of any Pensacola Beach resident.
Indeed, an even bigger media gorilla is waiting in the wings to take a swipe at both cable and broadcast stations: the old Ma Bell monopoly. To the consternation of lobbyists who have fed and clothed their children while buying off politicians to clear the way for media mergers, industry concentration has become so severe, now, that the lobbyists themselves are losing clients because of conflicts of interests. The fewer media owners there are, the fewer potential clients the lobbyists can work for.
Maybe Marx was right: capitalism does contain the seeds of its own destruction.
Mediacom balked, arguing that not all markets have the same value. The cable company also argued that Sinclair's insistence on 'all-our-stations-or-nothing' violates anti-trust laws which forbid "tying" arrangements, or what consumers generally experience as "now that you bought this, you have buy that one, too."
Late last month, however, an attempt was unsuccessful to persuade a federal court in Des Moines, Iowa -- one of Mediacom's larger cable markets -- to require continued carriage of local network channels while negotiations continue. Mediacom's antitrust argument struck U.S. District Judge Robert Pratt as unlikely to prevail in any future trial and so he denied the injunction.
Judge Pratt acted not because Sinclair Broadcasting doesn't have a dominant share of the market -- it does. In fact Sinclair is the "single largest operator of local televisions stations in the United States." And, his ruling wasn't based on the assumption Sinclair doesn't abuse its monopoly power -- it has done so regularly by such transparent abuses as Maryland-based Mark Hyman's weekly biased editorials which pretended to originate locally; and by the preemption of Ted Koppel's tribute to our military victims in the Iraq War; and by the effort to preempt regular programming for a nationwide anti-John Kerry harangue just before the 2004 elections; and, as Rolling Stone's Eric Linenberg put it a year ago, by "unabashed cheerleading for the Bush administration" throughout Sinclair's political coverage.
No, Judge Pratt's ruling was based on the fact that under the FCC's revised "must carry" regulations if the two oligopolists can't agree on retransmission terms, Mediacom is free not to deal at all with Sinclair. Wrote the judge about the current "must carry" contract:
Don't believe for a moment that either Sinclair, or Mediacom for that matter, is looking out for the public interest. Or that they really give a hoot about local service. As Don Hazen of Alternet recalled reading two years ago --
As a spokesman for the cable industry points out --
Saturday's Des Moines Register (which is another cog, don'cha know, in yet another media empire that has slipped beneath the radar of our nation's moribund antitrust laws) gives another number. Quoting Barry Faber, Sinclair's vice president and corporate attorney, the Gannet Corporation-owned Register claims that Sinclair is demanding "'50 cents or less' per month" for every Mediacom subscriber living within reach of a local Sinclair Broadcasting station.
If true, simple math suggests Sinclair expects to gild its coffers by as much as $350,000 every month or nearly $4.25 million a year from Mediacom subscribers, alone. Even the lower estimates suggest a windfall of more than $2 million a year for Sinclair if just Mediacom caves in.
Add similar per-subscriber fees from larger cable companies like Cox, Comcast, and Time Warner and Sinclair would have itself a mountain of new-found wealth for doing nothing more than pulling off a negotiating heist using strong-arm tactics.
"Sinclair needs to win," Broadcast & Cable Magazine wrote the other day. "The company has touted retransmission-consent payments as a key source of growth, telling investors the fees could reach $80 million-$100 million annually. If so, that would increase Sinclair's operating cash flow by 25%-30%."
That's $100 million in new revenues every year, without adding a smidgen of new content or value to Sinclair's broadcast properties.
A cynic might say no one will notice the difference; not even during channel 3's execrable evening
Mediacom has argued, with considerable justification, that if Sinclair wins this struggle it will set a negotiating precedent of sorts that will affect over seventy million more cable households, not just those served by Mediacom. Sinclair most assuredly will serve the same demands on every other cable company in the nation's major markets where it operates a broadcast station.
Indeed, Sinclair already has set its sites on cable giants Comcast and Time-Warner for repeat performances. Cox Cable, which serves Pensacola, can't be far behind.
Essentially, this means that virtually every cable system in Florida and the nation, for that matter, has a stake in the outcome of the Sinclair-Mediacom war.
No Good Guys
Over the past few months some friends who are nervous over losing access to this or that ABC network show have emailed or called us about the simmering dispute between Mediacom and Sinclair. To all, we frankly confess that we just can't work up much sympathy for either side. As far as we can see there are no good guys in this fight. Everybody to some extent is wearing a black hat.Under Sinclair's ownership, WEAR-TV has been steadily turned into one of the worst network television affiliates in the nation. If it weren't for the ABC network programs themselves, which thankfully Sinclair has no hand in creating, it's unlikely anyone would watch the station. Local programming is a bad joke. Even the station's news (and until recently its editorials) is largely phony-local, greatly dependent on well-camouflaged file stories arranged by Sinclair's Maryland headquarters.
As for Mediacom, like most cable franchises it enjoys a monopoly in the local service area -- and the dismal quality of its customer service and the near-total absence of local public access channel programming for Pensacola Beach and Gulf Breeze shows it. Or, at least it did enjoy a monopoly until thousands of locals began switching to satellite TV after Hurricane Ivan.
Still, as such things go Mediacom actually is one of the smaller players in the cable industry. It's ranked 8th in size among all cable companies. Unlike Sinclair, it is purely a carrier of others' signals. Also, unlike Sinclair it doesn't force its political views, whatever they may be, onto viewers.
So, we suppose, if we were forced by threat of losing Jim Leherer's News Hour to take sides, we'd probably sign up for a surge with Mediacom.
Most fans of Desperate Housewives or Boston Legal don't realize it, but the really bad actors in all of this are the seven Federal Communications Commissioners and the presidents who have appointed them over the past three decades.
"Must Carry" Rules
The immediate Sinclair-Mediacom dispute itself isn't complicated. It's about money and power. What the public is seeing now is just the tip-top of a giant iceberg known as media concentration.
As the chart at the top of this post shows, an oligopoly of only six media conglomerate giants now has a stranglehold on about 80% of all of America's mass media sources for news and information -- and much of our entertainment -- whether via TV, radio, newspapers, magazines, or the Internet. This alarming state of affairs is the product of three decades of consciously neglectful antitrust enforcement and rash, anti-consumer policies pursued by a bought-and-paid-for Congress and every presidential administration since the Fairness Doctrine was permanently abolished during Ronald Reagan's presidency. (For an abbreviated timeline of key events in media consolidation, see this summary.)
Since the early 1970s, the broadcaster-friendly Federal Communications Commission has enforced regulations stipulating that local cable companies "must carry" local over-the-air broadcast stations for free. The "must carry" rules initially were a government gift to local broadcasters who feared losing ad revenue to distant, new super-channel competitors like CNN, ESPN, WGN, etc.
However, as cable subscriptions mounted and broadcasters felt the competition, the FCC intervened again to revise the "must carry" rules and make them even more broadcaster-friendly. In 1994 new regulations allowed those broadcasters who presumably have no fear of losing ad revenue the option of withholding re-transmission consent unless local cable providers agree to pay them a fee.
Thus, under current law the "must carry" option rests exclusively with the local over-the-air broadcast station, in this case Sinclair Broadcasting, the distant owner of Pensacola Channel 3. It can either insist on carriage by the cable company for free, or it can demand, if it dares, payment for retransmission consent.
We say 'if it dares' because if the over-the-air broadcaster demands payment, as Sinclair has done, and the cable company can't or won't agree to the price the cable system then is liberated from the "must carry" obligation as to that local station.
That's what happened as of midnight Saturday to all Mediacom subscribers when Sinclair Broadcasting rejected Mediacom's eleventh-hour offer for binding arbitration. Only public outcries for another fix of Desperate Housewives can rescue Sinclair Broadcasting from the greedy corner into which it has painted itself.
Network Non-Duplication Rules
Why doesn't Mediacom simply substitute another ABC station for WEAR-TV? Because FCC "network non-duplication" rules also forbid the cable company (and now satellite companies) from importing any other network affiliate's broadcast signal.Congress recently mandated that the FCC re-study the non-duplication rules. It has been said that this was partly out of a concern that local broadcasters like Sinclair might do exactly what Sinclair is doing now: misuse the protections the FCC has given them to coerce cable companies into paying exorbitant fees to comply with the "must carry" rule.
But FCC commissioners appointed by George W. Bush have been notorious for encouraging more, not less, media consolidation while protecting the interests of the largest meda-media companies. Absent a dramatic change in federal campaign financing for congressional candidates -- as well as the White House occupant who appoints FCC commissioners -- no "study" much less meaningful reform in "must carry" or "non-duplication" rules is likely in the lifetime of any Pensacola Beach resident.
Indeed, an even bigger media gorilla is waiting in the wings to take a swipe at both cable and broadcast stations: the old Ma Bell monopoly. To the consternation of lobbyists who have fed and clothed their children while buying off politicians to clear the way for media mergers, industry concentration has become so severe, now, that the lobbyists themselves are losing clients because of conflicts of interests. The fewer media owners there are, the fewer potential clients the lobbyists can work for.
Maybe Marx was right: capitalism does contain the seeds of its own destruction.
When Oligopolists Collide
Sinclair is the party that put a fat fly in the ointment this time around. Last year, as the Iowa-based blog Corn 'o Copia noted in November, Sinclair Broadcasting stopped negotiating on the usual station-by-station and market-by-market basis and instead demanded that Mediacom "pay one price for all 23 Sinclair stations in 18 Mediacom markets... ."Mediacom balked, arguing that not all markets have the same value. The cable company also argued that Sinclair's insistence on 'all-our-stations-or-nothing' violates anti-trust laws which forbid "tying" arrangements, or what consumers generally experience as "now that you bought this, you have buy that one, too."
Late last month, however, an attempt was unsuccessful to persuade a federal court in Des Moines, Iowa -- one of Mediacom's larger cable markets -- to require continued carriage of local network channels while negotiations continue. Mediacom's antitrust argument struck U.S. District Judge Robert Pratt as unlikely to prevail in any future trial and so he denied the injunction.
Judge Pratt acted not because Sinclair Broadcasting doesn't have a dominant share of the market -- it does. In fact Sinclair is the "single largest operator of local televisions stations in the United States." And, his ruling wasn't based on the assumption Sinclair doesn't abuse its monopoly power -- it has done so regularly by such transparent abuses as Maryland-based Mark Hyman's weekly biased editorials which pretended to originate locally; and by the preemption of Ted Koppel's tribute to our military victims in the Iraq War; and by the effort to preempt regular programming for a nationwide anti-John Kerry harangue just before the 2004 elections; and, as Rolling Stone's Eric Linenberg put it a year ago, by "unabashed cheerleading for the Bush administration" throughout Sinclair's political coverage.
No, Judge Pratt's ruling was based on the fact that under the FCC's revised "must carry" regulations if the two oligopolists can't agree on retransmission terms, Mediacom is free not to deal at all with Sinclair. Wrote the judge about the current "must carry" contract:
"The Court is reluctant to force Sinclair to maintain a business relationship with Mediacom when both parties clearly contemplated, and agreed to, a termination provision," Judge Pratt said. "Mediacom will not likely succeed in its attempt to establish an illegal tying arrangement because Mediacom is not being coerced into carrying the tied stations."
All About Money
Don't believe for a moment that either Sinclair, or Mediacom for that matter, is looking out for the public interest. Or that they really give a hoot about local service. As Don Hazen of Alternet recalled reading two years ago --
"Sinclair has turned localism on its head," Mark Cooper, research director of the Consumer Federation of America, told the Chicago Tribune. "Instead of using its right to pre-empt national programming to preserve a local voice, it wants to impose its political will on 62 local stations."The only interests Sinclair holds dear are its own. Let's remember that WEAR-TV is using, for free, electronic bandwidth which by law belongs to the public.
As a spokesman for the cable industry points out --
[T]he broadcast industry enjoys $105.2 billion in revenue and value from the public airwaves: $11 billion in analog spectrum; $24 billion in annual local ad revenue; $70 billion in digital spectrum; and $200 million in annual copyright payments.
Neither side has been forthcoming about the numbers they're arguing over. Some sources claim that "Sinclair laid out a price schedule to Mediacom calling for 36¢-40¢ per subscriber monthly for systems carrying any of the company's affiliates of the Big Four networks." But Dow Jones newswire two days ago carried a story suggesting that "For the first time, Sinclair is demanding an up-front cash payment from Mediacom in order to permit its channels to be broadcast."“How does the broadcast industry thank the American taxpayer for this grant?” ACA CEO Matt Polka asked. “By seeking hundreds of millions more in direct retransmission-consent payments from taxpayers who subscribe to cable to receive their free over-the-air television signals."
Saturday's Des Moines Register (which is another cog, don'cha know, in yet another media empire that has slipped beneath the radar of our nation's moribund antitrust laws) gives another number. Quoting Barry Faber, Sinclair's vice president and corporate attorney, the Gannet Corporation-owned Register claims that Sinclair is demanding "'50 cents or less' per month" for every Mediacom subscriber living within reach of a local Sinclair Broadcasting station.
If true, simple math suggests Sinclair expects to gild its coffers by as much as $350,000 every month or nearly $4.25 million a year from Mediacom subscribers, alone. Even the lower estimates suggest a windfall of more than $2 million a year for Sinclair if just Mediacom caves in.
Add similar per-subscriber fees from larger cable companies like Cox, Comcast, and Time Warner and Sinclair would have itself a mountain of new-found wealth for doing nothing more than pulling off a negotiating heist using strong-arm tactics.
"Sinclair needs to win," Broadcast & Cable Magazine wrote the other day. "The company has touted retransmission-consent payments as a key source of growth, telling investors the fees could reach $80 million-$100 million annually. If so, that would increase Sinclair's operating cash flow by 25%-30%."
That's $100 million in new revenues every year, without adding a smidgen of new content or value to Sinclair's broadcast properties.
The Losers
The public, as always, will be the real losers however the dispute turns out. If Mediacom caves in to Sinclair's greedy demands, cable subscribers will see their bills significantly hiked. If it doesn't, FCC regulations ensure that Mediacom subscribers will not receive whatever network affiliate happens to be owned by Sinclair Broadcasting in their locality.
In either event the public has lost already. Federal law as enforced by the FCC, and as not enforced by the Justice Department's Anti-trust Division, has taken the public airwaves, handed them over for free to the likes of Sinclair Broadcasting, and then given that broadcaster a virtual license to rob cable customers at the point of a threat that otherwise they will lose a bit more of what little programming diversity they now enjoy with four networks.
In either event the public has lost already. Federal law as enforced by the FCC, and as not enforced by the Justice Department's Anti-trust Division, has taken the public airwaves, handed them over for free to the likes of Sinclair Broadcasting, and then given that broadcaster a virtual license to rob cable customers at the point of a threat that otherwise they will lose a bit more of what little programming diversity they now enjoy with four networks.
Amplification Dept.
Cedar Rapids (Ia.) Town Square blog thinks Sinclair is bad news and "incredibly arrogant" while Mediacom has bad PR.
2 comments:
I disagree somewhat about Mediacom. They are O.K. Expensive but worth it. Hope they stick it to ch. 3 which is worthless.
We all can agree that both are going to be losers in the end. Contracts have ends and advertisers have a way of swaying other markets to deliver what the public wants like the superbowl. For me I guess I will have to turn off the tube in protest and go to the pub to watch the superbowl. The pub will appreciate the business more anyway!!
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