ABC7 vs Cablevision: How much does ABC want Cablevision to pay?

Alert! ABC7 is now back on the air.

As March 7th looms closer, Cablevision steps up their game by adding Twitter and Facebook groups to counteract against ABC’s Twitter and Facebook fan page.  

For now it appears viewers are siding with Cablevision. I think ABC kind of shot themselves in the foot when they released a letter to FCC Chairman Julius Genachowski. In this letter it answers the question if other “cable” providers pay for the rights to broadcast ABC on their service.

I can definitely see a change ABC’s attitude. It’s tilting more towards the “we demand to be payed” rather than it’s Cablevision’s fault.

However Cablevision is pretty aggressive with their attacks against ABC, and their bold claims may hurt them in the end.

Do TV Providers charge to view local channels?

After some research involving the FCC broadcast rules and the letter recently released to FCC Chairman Julius Genachowski, it appears other “cable” companies such as Comcast, Verizon Fios, do in fact pay some portion for ABC.

The charges each companies pay are kept private. However this fee is automatically included in the standard TV service. Remember the exact amount is unclear, unless otherwise stated by a news source or the companies themselves.

Taken from the FCC’s website:

In general, a cable television operator has the right to select the channels and services that are available on its cable system. With the exception of certain channels like local broadcast television channels which are required to be carried by federal law…

Cable companies generally are required to offer a basic service tier. The company generally requires all subscribers to purchase this tier before purchasing additional video programming. The basic service tier is required to include, at a minimum, the local broadcast television stations and the public, educational, and governmental (PEG) access channels that the operator may be required to offer pursuant to an agreement with the local government.

Being a part of any cable network including FIOS, you are required to pay for the basic service tier which includes ABC7 and other local channels. When ABC says you have been paying to access ABC7, they are indeed correct. The exact amount you pay for ABC is not shown.  However, you can see their proposed amount at the bottom of this post. As for the claim if Cablevision has been pocketing the money, I have no clue. There isn’t any way for me to see what’s actually done with the money.

Does ABC charge TV Providers?

This question was asked by one of my commenters and I wanted to know as well. For the most part, using over the air “rabbit ears” antannea, you are not charged to view ABC in standard and high definition. ABC broadcasts this signal for free. However, it appears, according to the letter, they do in fact negotiate how much each television provider is required to pay to access their local channels.

As the deadline approaches for the retransmission consent negotiations over carriage of ABC signals with Cablevision’s New York service area… Retransmission consent negotiations are private discussions between broadcasters and cable or satellite operators for access of programming on one side, and access to pay-tv distribution on the other…

Services  providers and programmers are closest to their viewers and in a better position than the government to weigh the costs and benefits of carriage deals…

Basically the letter is pretty much saying, get your government hands off my healthcare! Oops I meant to say, ABC doesn’t want any governmental influence over their  private negotiations with Cablevision.  So yes, ABC wants to negotiate a deal with Cablevision  demanding a certain price to access their channels. 

This “retransmission consent” results into whats known as a retransmission fee. Every broadcast network including ABC, NBC, CBS, and PBS can negotiate a certain rate at which a cable company should pay to access their channels.
(Read more about Retransmission Consent)

Unfortunately if both parties can not agree upon a retransmission fee negotiation, the broadcast network can indeed pull the plug. Even Verizon FIOS has to submit to these retransmission fees as seen in this article with Univision networks.

Yet the letter also shows that their channel’s programming can be viewed in different forms of media, especially over the air and the internet for free.  They also mention  how you can watch their shows on a “phone company” TV. Hmm I wonder who that could be.

What would be considered as a fair deal?

To take this into perspective lets look at Time Warner Cable vs FOX. From the dispute resolutions it appears FOX wanted around $1 per cable customer to carry their networks. According to NY Times, although the source wanted to claim anonymity, Time Warner Cable thought 30 cents per cable customer was a reasonable amount. You can apply the same principle to ABC and Cablevision. Someone wants a raise, but who’s going to pay?

Again, according to NY Times, ABC wants around $1 per cable customer per month and Cablevision believes 25 cents per cable customer was a reasonable amount.

ABC believes Cablevision should cough up the dough anyway since, “if you were one of the largest cable providers in the tri-state area, and you made $7.7 billion dollars in 2009 (an increase of $542 million from the year before) why would you refuse to pay ABC7 for their content?”

How Much Is Each Network?

The latest SaveABC7 campaign shows a Cablevision bill charging $16.72 for Basic Cable. We won’t really know how much each local channel demands. Although, you can assign a basic dollar and cents amount to each local broadcasting channel, then total that amount.

Local Channels broadcasting in my area:

• One CBS + HD Channel
• Two NBC + HD Channels
• Three FOX + HD Channels (including MyNetwork TV)
• Two ABC + HD Channels (Asking for 1$ per cable customer)
• One CW + HD Channels
• Two PBS Channels

This basic tier also includes channels such as ION Television, several ABC owned cable channels, and several FOX  owned cable channels. Just by assigning a price to each individual “must have” broadcast channel, you can see how this basic cable bill really adds up.

I don’t really want to take any sides. I just feel as if both companies aren’t telling the whole story and it leaves people in the dark as to what’s really going on.

I’d like to see these negotiations made in public so the viewer himself can decide who’s right and who’s wrong.

[via nytimes]

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