2011 Year In Review: Retransmission consent battles get ugly

The news: Battles involving demands that cable and satellite distributors pay increased fees to transmit local TV stations to subscribers increased in 2010, and some affiliates that refused to pay increased fees lost local broadcast programming.

Mediacom Communications was hit the hardest, going 12 weeks during the fall without TV stations owned by Sinclair Group, after it failed to agree to terms to a contract renewal. While Mediacom eventually agreed to an increased fee, it lost 22,000 subscribers during the third quarter. Its fight with Sinclair may have contributed to its subscriber losses.

Following its acquisition of NBCUniversal, Comcast became one of the biggest station group owners and one of the biggest proponents for increased retransmission-consent fees. NBCU chief Steve Burke rattled some of his former cable colleagues when he said at an investor conference in September that Comcast expects to generate "hundreds and hundreds of millions of dollars" each year from retransmission-consent.

"Retransmission consent dollars is not a good thing for the cable side of Comcast, but it's going to be a very good thing for NBCU," Burke said.

DirecTV and Fox Cable Networks staged one of the most public battles of the year between a programmer and distributor, after DirecTV threatened to drop FX, National Geographic Channel and other Fox-owned networks unless Fox backed down from demands that it pay a sharp increase in its cable license fees. DirecTV and Fox later settled their dispute, signing a broad distribution deal that also included a retransmission-consent agreement for TV stations owned by Fox.

Debate over retransmission consent also saw cable and satellite rivals such as Time Warner Cable and Dish Network team up with smaller operators led by the American Cable Association to press the FCC to reform its retransmission-consent rules.

Why it's significant: With consumers attempting to reduce costs, cable and satellite providers complain that they are forced to pass increased fees for retransmission consent on to their subscribers by raising the rates on basic cable programming tiers.

The $28 billion, nine-year rights deal that CBS, NBC and Fox signed with the National Football League in December will likely force network affiliates to squeeze increased retransmission-consent fees from cable and satellite providers. The debate is also generating more attention in Washington, D.C., as Republican lawmakers introduced a bill that could eventually lead to the reform of the FCC's retransmission-consent rules.