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Tom Rutledge Testimony to U.S. Senate Committee on Commerce, Science and Transportation, Nov. 17, 2010

Tom Rutledge Testimony to U.S. Senate Committee on Commerce, Science and Transportation, Nov. 17, 2010

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Tom Rutledge Testimony to U.S. Senate Committee on Commerce, Science and Transportation, Nov. 17, 2010.
Tom Rutledge Testimony to U.S. Senate Committee on Commerce, Science and Transportation, Nov. 17, 2010.

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Published by: BrianStelter on Nov 17, 2010
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12/21/2010

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1
 
ORAL TESTIMONY OF THOMAS RUTLEDGE
United
 
States
 
Senate
 
Commerce
 
Committee
 
November
 
17,
 
2010
 
I am Tom Rutledge, Chief Operating Officer of Cablevision Systems Corporation.Let me begin, Mr. Chairman, by commending you for theleadership you have shown in this area. As you have rightlynoted, broadcast retransmission disputes are wreaking havoc onconsumers, and we ought to find a way to resolve them withoutholding consumers hostage.Your draft legislation is a good framework for advancingthis goal, and we look forward to working with you and othersto take consumers out of the middle.I would like to make two central points today:First, retransmission consent negotiations take place withina highly regulated environment that heavily favors broadcastersover distributors, and hurts consumers. It is not a free market.Plain and simple, the rules create the potential for network television blackouts and raise prices for consumers.
 
2
 
Second, because government
 
laws created the problem,only the government – the FCC or Congress – can fix it. Wehave proposed a few modest changes to stop blackouts andprotect consumers.
* * *
Here is why retransmission consent is broken:
 
FCC rules give local broadcasters a
government-sanctioned monopoly
on national network programming in local markets.
o
If a cable or satellite provider wants to carry that network programming, but thinks the local broadcaster’smonopoly price is too high, too bad – FCC rules
 prevent 
 that provider from negotiating with
any
of the hundred orso other stations across the country that have the samenetwork content.
Government rules also require that our subscribers buy thebroadcast channels before they are allowed to buy any othercable service regardless of whether the consumer wants thatstation and regardless of the price charged by the broadcaster.
 
 
3
 
The government gives broadcasters free distribution, in theform of free spectrum, and gives them an extraordinaryguarantee of carriage through “must carry.”
Finally, cable operators are prohibited by law from dropping abroadcaster during “sweeps week” yet nothing prevents thebroadcaster from pulling the signal from the cable operatorbefore big televised events – such as the Academy Awards orthe Super Bowl.
o
Just last month, Fox pulled its network programmingfrom three million New York-area households for 15days, blacking out Major League Baseball playoffs, NFLfootball and the World Series.
o
The rules that allowed this blackout were created byCongress and administered by the FCC, but the FCCclaimed it had no power to restore the programming.

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