ESPN sports hit hard on cable costs

News Corp., DirecTV merger debated in D.C.

WASHINGTON — With allegations flying, cablers turned ESPN sports network into a punching bag during a congressional hearing Tuesday, blaming it and other programmers for soaring cable costs.

The heated debate took place as Washington begins to weigh in on the megamerger of News Corp. and DirecTV and right before the FCC votes on sweeping changes to media ownership rules, skedded for June 2.

News Corp.’s Rupert Murdoch had a scheduling conflict and could not make Tuesday’s hearing, but he will have a chance to sell the merger to lawmakers when he takes the hot seat Thursday at a House Judiciary Committee hearing.

At one point, Cablevision Systems Corp. chairman Charles Dolan urged Congress to revamp cable laws to reduce the hold broadcast companies have on cable operators and expand the number of programming options consumers have.

Cox vs. Cablevision

James Robbins, prexy of Cox Communications and Charles Dolan, chairman of Cablevision Systems Corp., locked horns with Leo Hindery, chairman of the YES Network, which owns programming rights to the New York Yankees and other sports teams, several times during the hearing.

“Cable prices are rising and soaring program costs are largely to blame,” Robbins remarked.

His statements earned a sharp rebuke from Hindery.

“I find it beyond irresponsible for cable industry leaders to blame programmers for their often excessive rate increases, when the facts clearly belie this contention and especially when more than half of the channels available to consumers are actually owned by cable companies,” he said.

ESPN, which recently announced a 20% rate increase, was held up as an example of what happens when broadcasters are allowed to wield too much power.

During the middle of the hearing, company officials felt compelled to circulate a statement from ESPN president George Bodenheimer.

“Ripping ESPN and other popular networks out of basic cable and charging more for them is not pro-consumer,” he said.

Cablers tout choice

Cablers also argued that consumers should be allowed to pick and choose programs a la carte. Government mandates now force customers to buy a complete package — a policy Dolan wants Congress to repeal.

“Let the customer decide,” he said.

Although Rupert Murdoch had a scheduling conflict and could not make the hearing, panelists took the opportunity to sound off on News Corp.’s proposed merger with DirecTV.

James Gleason, president of CableDirect, a smaller cabler serving rural areas, argued that the merger would “limit current competition and choice in U.S. markets, particularly in smaller and rural communities.” He called on the FCC and the Justice Dept. to scrutinize the merger carefully and restrict it if necessary.

Sen. Byron Dorgan, D-N.D., took a swipe at the FCC and what many Democrats and consumer groups fear will be a relaxation of the media consolidation rules.

“It looks like we’re dressed ready and poised to be marching backward once again in June,” he said of the impending rewrite.