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Britt Testimony 11-16 v4

Britt Testimony 11-16 v4

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Published by: BrianStelter on Nov 17, 2010
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Testimony of Glenn A. BrittChairman, President and CEOTime Warner CableBefore the United States SenateSubcommittee on Commerce, Technology and the Internet³Television Viewers, Retransmission Consent, and the PublicInterest´November 17, 2010
Good afternoon Mr. Chairman, Ranking Member Ensign, and members of the subcommittee.I want to thank you for inviting me to be here today. I also want toexpress my appreciation to Chairman Kerry and other Members of Congresswho have recognized that the current retransmission consent regime isfundamentally broken and in need of reform. In my testimony, I will focus onthree points to demonstrate why reform is needed:First, Congress created retransmission consent 18 years ago as a newproperty right to subsidize free, over-the-air broadcasting. But much haschanged since that time. When retransmission consent was first created,broadcasters and cable operators each enjoyed local monopolies. As a result,the parties negotiated from relatively equal positions of strength and with a
shared interest in reaching an agreement on mutually beneficial terms. Thisproduced a process that was essentially invisible to the public.But retransmission consent negotiations now occur in a vastly differentenvironment. Today, the pay TV industry is robustly competitive, while localbroadcasters retain the government-granted monopolies and other benefitsthat now distort carriage negotiations. This has allowed broadcasters to playcompeting distributors off of each other and has encouraged broadcasters totake more extreme, disruptive positions instead of seeking compromise.Consumers, caught in the middle, are the ones getting hurt.Unfortunately, this imbalance in negotiating power is exacerbated bythe FCC¶s rules which take a hands-off approach based on the outdatedassumption that broadcasters have neither the incentive nor the ability todisrupt viewers¶ access to their signals. The FCC has broad statutoryauthority over broadcasters and their retransmission consent rights. TimeWarner Cable and an unprecedented coalition of diverse interests have askedthe FCC to exercise its authority by adopting new rules to protect consumers,such as interim carriage and dispute resolution measures. Despite widesupport for these and other reform proposals, and the growing number of disruptive retransmission consent disputes, the FCC has failed to act. Instead,
the FCC insists that its hands are tied when it comes to protecting the publicfrom the consequences of retransmission consent fights.My second point focuses on the impact on consumers, who are bearingthe brunt of the FCC¶s inaction. Broadcasters have both the incentive andability to put consumers in harm¶s way during negotiations. As we have nowseen on several occasions, broadcasters clearly are willing to hold consumershostage by pulling their signals as a negotiating tactic. Even when a serviceinterruption is avoided, consumers still are needlessly subjected to weeks andeven months of misleading advertising designed not to inform them, but toexert pressure on pay TV providers to give in to demands for higher fees thatultimately will be paid by consumers.Finally, I would like to put to rest one of the arguments often made bythose opposing reasonable reforms ± namely that the government should not³interfere´ with ³free market´ negotiations. Time Warner Cable agrees thatfree markets are preferable to regulated markets. Retransmission consent,however, is not a free market. Rather it is one of a number of specialprivileges given to broadcasters by the government as part of a thicket of outdated regulations. These special privileges, which also include must carryrights, territorial exclusivity protection, a guaranteed right to basic tiercarriage and, of course, the broadcasters¶ free use of the public airwaves, are

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