Cable TV legislation passed recently by Congress was prompted by a “special-interest feeding frenzy that only Ross Perot could adequately describe, ” Discovery Communications topper John Hendricks claimed yesterday.
Hendricks, speaking before the Washington Metropolitan Cable Club, attributed the bill’s passage to the strong lobbying efforts of broadcasters. “One thing I have learned from this is the enormous power of the broadcasting lobby in an election year,” said Hendricks.
Congress two weeks ago overrode a cable bill veto by President Bush. The bill regulates basic tier cable rates, ensures cable’s competitors such as “wireless” cable and DBS access to cable network programming, and also includes a must-carry/retransmission consent provision that guarantees cable’s carriage of a broadcast station or allows a broadcaster to negotiate compensation for cable’s carriage of the local station signal.
Hendricks predicted the must-carry/retransmission consent provision will be overturned in court as unconstitutional. He noted that courts have twice ruled that must-carry violates the free-speech rights of cable operators.
“Must-carry is a time-release poison pill that sits in the belly of retransmission consent,” said Hendricks, “and so the broadcasters should not count their newfound money from the cable bill just yet.”
Looking beyond the cable bill, Hendricks said the rollout of digital compression will foster a “third revolution in television” leading to vastly higher revenues for the cable industry. (The first revolution in TV was the introduction of the medium itself, per Hendricks; the second revolution was the launch of HBO in 1975.)
Compression–the technology that allows cable operators to greatly increase channel capacity–will usher in an era of “programming on demand,” Hendricks said. Movies will pave the way in the new era, but broadcasters will find the economics “so enticing that (they) will join in and offer their most valuable programs–like “60 Minutes,””Nightline” and “Murphy Brown”–at any time during the week after initial broadcast airing, he predicted.
“On a Thursday night, when you are scanning the channels for something good, how much would you pay to order up ’60 Minutes,’ or the latest TNT movie, or the latest $ 1 million nature documentary from Discovery–25 cents, 49 cents, maybe 69 cents?” asked Hendricks. “Do some math this afternoon, and then run out and buy some cable stocks.”