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Mediacom set to lose Channel 2
by Rob Poggenklass · News · November 29, 2006
Liberty manager says TV may be headed for more such fights
When they turn on their TVs this Friday, there’s a good chance that Mediacom customers in West Branch will find one fewer channel than they had on Thursday.
KGAN Channel-2, the local CBS affiliate based in Cedar Rapids, is slated to be removed from Mediacom’s channel lineup effective Friday, Dec. 1 because of a financial dispute with Sinclair Broadcast Group, the channel’s content provider.
This year, the fight has been limited to Mediacom, which is set to lose 22 Sinclair stations in 15 markets nationwide, including Cedar Rapids and Des Moines. But the manager of a local TV and phone company says this may be just the first of many such fights between content providers and service providers in the coming years.
“That’s just the way I think TV is headed,” said Jerry Melick, manager of Liberty Communications, a West Liberty-based company that competes with Mediacom for TV customers in West Branch. “It’s very ugly.”
News reports Tuesday said that a Monday meeting between Mediacom and Sinclair, which was moderated by an official from the Federal Communications Commission, produced no results.
KGAN and Mediacom have both advertised the situation, and Mediacom has sent letters to its customers and to cities with which it has franchise agreements, including West Branch.
Mediacom has said that it has tried to negotiate in good faith with Sinclair for the rights to broadcast KGAN, but that Sinclair is charging $1 million more than the cable provider has paid for similar stations under other ownership — such as KCRG, which is owned by Gazette Communications, and KWWL, which is owned by Quincy Newspapers, Inc.
Sinclair, in a question-and-answer page on KGAN’s website, encourages customers to tell Mediacom how important it is that the company continue to carry KGAN. In anticipation that no deal will be worked out with Mediacom, Sinclair is telling customers to switch to the satellite providers DirecTV and DISH. Both of those companies have used advertising campaigns to woo Mediacom customers. Melick said that may be because the satellite companies, which operate in markets nationwide, have more bargaining power with content providers like Sinclair, and already have agreements in place for channels such as KGAN.
While it’s difficult to say who has a firm agreement with Sinclair, it’s possible that the media giant could try the same tactic it’s tried with Mediacom on other providers, such as Liberty. That’s why this situation has Melick rooting — strangely enough — for Mediacom.
“Now that I’m in the business, I feel a little bit of sympathy for them,” he said. “Sinclair can be difficult to work with.”
The dispute has led some customers to switch away from Mediacom. Melick said Liberty has picked up some new subscribers because people are worried about losing Channel 2, which carries such programs as CSI and Survivor, Iowa Hawkeye basketball, and early next year, the NFL Super Bowl.
Such programming makes it difficult for Mediacom to drop KGAN from its cable package. But if customers don’t switch, it’s Sinclair that loses, because it will have fewer outlets for the advertising sold on its stations. Content and service providers depend on each other.
“Content is king,” Melick said. “But you’ve got to have the pipe to get it to the house.”
Melick said these kinds of fights could become more common as TV broadcasting moves toward the all-digital age. On Feb. 1, Congress passed a law requiring all TV to be broadcast digitally starting Feb. 17, 2009 — little more than two years away. Melick said he hopes Congress will step in soon to lay out the rules for negotiations between content and service providers, to avoid fights like the one between Sinclair and Mediacom.
“I think this is a harbinger for a big battle that will be fought in (Washington) D.C,” he said.
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