Posts Tagged ‘Retransmission’
July 18th, 2019 at 8:56 pm
TV Blackouts Reconfirm Need for Free Market Regulatory Reform
Posted by Print

For over two weeks now, failed retransmission negotiations between AT&T and Nexstar Media Group have deprived customers across the United States of 120 Nexstar television stations in 97 markets.

That’s unfortunately something to which far too many Americans have become accustomed recently, as 2019 has already witnessed more TV blackouts than any year in history.  And the news only gets worse:  CBS is now warning that stations in numerous major markets, including New York, Los Angeles, Chicago, Philadelphia, Dallas and others, could be blacked out as this week concludes.

Here’s the overarching problem.  Current laws dating all the way back to 1992 empower the federal government to pick TV market winners and losers by tipping the scales during negotiations.  Those laws governing what’s known as “retransmission consent,” “must-carry” obligations and “compulsory copyright” all derive from a bygone era, when most markets were served by a solitary cable provider.  But today, almost 30 years later, we obviously live in a drastically different consumer marketplace.  Specifically, alternative services like satellite, internet and other cable providers provide an expansive array of consumer options in the TV marketplace.

Yet here we are in 2019, with applicable federal regulations that remain unchanged, and fail to accommodate the fundamental video market evolution that has occurred.  Consequently, broadcasters today possess an unfair regulatory advantage in negotiations with providers, which in turn empowers them to insist upon excessive retransmission consent fees while retaining the alternative option of invoking must-carry rules.  In that manner, outdated laws inhibit free market principles from functioning in what should be an ever-evolving consumer marketplace.

And who pays the steepest price of all?  Consumers.  Including in the form of blackouts like we’re witnessing.

To finally put an end to these increasing blackouts, and spare consumers the headaches, we must reduce the federal government’s interference in the nationwide video marketplace.  That will allow broadcasters and video programming distributors to negotiate in a more even, market-centered environment.  An optimal scenario would be to enact the Next Generation Television Marketplace Act proposed earlier by Congressman Steve Scalise (R – Louisiana).  But in any event, consumers should demand that the federal bureaucracy remove its metaphorical finger from the scale, and instead finally allow all parties to negotiate in a free market, one in which neither side enjoys an inherent regulatory advantage.  Eliminate the outdated regulations, and allow the free market to work.

In a video market otherwise defined by rapid evolution and ever-greater choices, consumers deserve relief at long last.


March 6th, 2014 at 10:59 am
STELA Reauthorization: An Opportunity for Pro-Market Reform
Posted by Print

On December 31, 2014,the Satellite Television Extension and Localism Act (STELA) is set to expire.  The House Energy and Commerce Subcommittee on Communications and Technology is in the process of reauthorizing the law, and that provides a critical opportunity for pro-market reform by modernizing anachronistic regulations like retransmission consent agreements and must-carry provisions of the 1992 Cable Act.

So what is STELA, and why should conservatives and libertarians care?

Well, when the Cable Act became law in 1992, the prevailing concern was that cable operators might somehow employ monopoly power to block local broadcast stations in their home areas.  Accordingly, the Act tipped the scales in favor of broadcasters by granting them the right to guaranteed carriage or the right to compel cable operators to pay stations for consent to retransmit their broadcasts to local subscribers.  STELA, enacted in 2010 and due to expire at the end of this year, essentially maintained many of those outdated rules.

Today, more than two decades later, the television marketplace is much more competitive and no longer resembles the 1992 state of affairs.  Consumers now possess innumerable options in channel selection and the means to access them, from cable to fiber optics to online to multiple satellite and cable providers.  Yet despite that evolution, the government-imposed advantage for broadcasters remains.  Multi-channel video programming distributors (MVPDs) like cable, satellite and fiber providers are prohibited under current outdated regulations from disconnecting service during sweeps week, but broadcasters remain free to do the same thing during such events as the World Series in which the local team is playing.  Thus, broadcasters maintain government-created negotiating power through the retransmission consent rules, and are guaranteed a place on cable companies’ basic tier.  That tipping of scales has resulted in consumers suffering service disruptions and cost increases.

Fortunately, the opportunity has arrived for Congress to do something about it, and allow greater negotiating balance and a more even playing field.   As part of STELA reauthorization, Congress can at the very least jettison the prohibition against MVPDs disconnecting service during sweeps week if necessitated by a negotiating impasse with intransigent broadcasters, as well as broadcasters’ government-granted right to placement on cable companies’ basic tier, which it appears ready to do.

The federal government simply shouldn’t be playing favorites or tipping the scales in an industry as dynamic as this, and STELA reauthorization provides the perfect opportunity to correct those existing defects.