Will local stations pull plug on cable? December 14, 2005 12:00am Source: Erie Times-News (PA) (KRT) Dec. 13--The days of getting free television feeds on cable from broadcast networks such as ABC and CBS could soon be a thing of the past. Officials from Nexstar Broadcasting Group Inc. and Lilly Broadcasting -- the corporate owners of Erie's commercial network affiliates -- said Monday they each are negotiating contracts with the region's cable carriers that, for the first time, could net them a per-subscriber payment from the cable companies. Nexstar, which owns Erie's ABC affiliate, WJET-TV, and Fox's affiliate, WFXP-TV, is looking to receive about 30 cents per subscriber in its agreements, a company official said Monday. Lilly Broadcasting, which owns Erie's NBC, CBS, UPN and WB affiliates, also is discussing retransmission agreements with cable companies that could include a fee per subscriber, though it would not specify the size of that fee. The demands come at a time when local broadcasters are investing millions in federally mandated high-definition broadcasting equipment and are receiving fees from satellite providers for their signals. "In the past, there wasn't a whole lot of leverage," said Duane Lammers, chief operating officer for Nexstar. "With satellite now paying us, that's the goal with cable companies as well. We're certainly negotiating more favorable terms than we have ever before." But those terms have not come without a cost in some markets, as some cable companies, including Erie's Time Warner Cable, contend they should not be paying local broadcasters for signals that can be received for free over an antenna. "We have held for some time that we wouldn't pay cash payments to carry a broadcast signal that is available to anyone with rabbit ears," said Mark Harrad, a Time Warner spokesman. That stance, which is shared by some cable carriers nationally, has prompted Nexstar, which operates 46 stations in 27 markets, to pull its stations from cable systems in some parts of the country that have been unwilling to pay for its programming. Lammers said Nexstar's stations are off the air for customers of Cable One -- a cable carrier in Missouri and Texas. Nexstar stations also went black in the Cox Cablevision system for 10 months earlier this year after it was unable to strike a deal with the cable carrier. The standoff affected Cox customers in San Angelo, Abilene, Sweetwater, Snyder and Mount Pleasant in Texas; Magnolia, Ark.; and Bossier City and Minden, La. A similar scenario could play out in some parts of northwestern Pennsylvania if Nexstar is unable to reach deals with local cable carriers by the time the current contract expires Dec. 31. Lammers, however, said he is hopeful his company will be able to settle all of its contracts by that date. Brian Lilly, general manager for Lilly Broadcasting, said his company already has deals with about 40 percent of the region's cable carriers and is optimistic that it can reach agreements with the remaining carriers by Dec. 31. But if those discussions turn sour, Lilly said the company would be willing to pull its stations from local cable carriers in some parts of the region. "That's a possibility," he said. "If that is a possibility, we will make sure we run crawls and alert viewers in those areas." Neither Lilly nor Lammers would specify which of the region's 10 cable carriers already have signed deals. One of those carriers, Coaxial Cable Television of Edinboro, is owned by the Times Publishing Company, which publishes the Erie Times-News. Katy Bachman, senior editor of Mediaweek magazine, said the push by local broadcasters to command fees from cable companies carries some risk for the broadcasters, who lose cable subscribers as potential viewers. That risk is considerable, since 60 percent of U.S. households subscribe to cable, according to an August survey by J.D. Power and Associates. But, with alternatives growing for viewers, those risks are not as great as they have been in the past. The J.D. Power survey found 27 percent of households subscribe to satellite service -- up from just 19 percent in 2004. With that increased leverage, local broadcasters are now looking for a slice of the cable television pie. "(Broadcasters) let this giant monolith called cable build up and up and charge enormous rates and they're not seeing a cent of it and they're tired of it,"Bachman said. "It's very brave of Nexstar -- being a smaller broadcaster in smaller markets -- to stand up to these large cable systems." The battle, however, hurts consumers, either through higher cable rates or through fewer choices on cable. "What's happening is the consumer loses in these fights," she said. "But the broadcasters feel like they have no other choice." Staff writer Dave Richards contributed to this report. <<Erie Times-News (PA) (KRT) -- 12/14/05>> << Copyright ©2005 Erie Times-News, Pa. >> ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.