On a recent episode of the Federal Newswire Lunch Hour podcast, CFIF's Timothy Lee joined host Andrew…
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The Lunch Hour - FTC Overreach, 'Junk Fees' and More

On a recent episode of the Federal Newswire Lunch Hour podcast, CFIF's Timothy Lee joined host Andrew Langer and Daniel Ikenson, Founder of Ikensonomics Consulting and former Director of Trade and Policy Studies at the Cato Institute, to discuss Federal Trade Commission overreach, so-called "junk fees," and more.

The conversation focuses on "the FTC's increasingly aggressive regulatory posture under Chair Lina Khan, highlighting concerns about overreach, economic consequences, and implications for constitutional governance."

Watch below.…[more]

December 05, 2024 • 12:18 PM

Liberty Update

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CBS – Time Warner Standoff Reemphasizes Need to Deregulate TV Marketplace Print
By Timothy H. Lee
Wednesday, August 07 2013
The overarching problem is that telecommunications and media continue to advance, while federal regulations have stood still.

While CBS and Time Warner struggle to reach agreement over fees for carrying CBS’s programming, most Americans not impacted by the blackout view the standoff in the same way they view a Senate filibuster or professional athlete holdouts.  Namely, a distant source of annoyance, to the extent they pay any attention at all.  At the end of the day, people just want reasonably priced, reliable access to the media and entertainment for which they pay every month without having to worry about how it arrives. 

That is perfectly understandable.  But the current imbroglio once again illustrates the broader problem of the obsolete regulatory system currently in place, as well as the desperate need for market-based reform.  

And that’s exactly why all Americans should care.  Without that reform, we will likely witness even more frequent standoffs like this one, or the near-blackout of the 2012 Patriots/Giants Super Bowl for Boston viewers or the 2010 World Series blackout two years before that. 

For a glimpse of just how overdue reform is, consider that the last comprehensive overhaul of TV regulations occurred in 1992.  In the 21 long years since that time, society has witnessed not only an explosion in entertainment options, but also an unprecedented expansion in the sources of delivery for those entertainment options. 

Yet we’re still governed by regulations dating to when George H. W. Bush was President and Johnny Carson was delivering monologues. 

The overarching problem is that telecommunications and media continue to advance, while federal regulations have stood still. 

Under current law, for instance, the doctrine of “retransmission consent” requires cable providers to obtain permission from broadcasters like local CBS affiliates in order to carry their programming.  In exchange, those broadcasters demand payment terms that often penalize cable operators and their customers by charging much higher per-capita fees.  Meanwhile, the cable operators are prohibited by current law from offering broadcast signals from other neighboring TV markets, even if those broadcasters are willing to do so at a more attractive charge. 

Accordingly, existing one-sided regulations limit cable operators’ options by forcing them to either accept the broadcasters’ demands, or be unable to carry that programming.  In contrast, negotiations with non-broadcast channels like AMC or Discovery occur in a more deregulated environment, allowing for greater good faith mutual bargaining. 

If negotiations for retransmission consent fail or if broadcasters decide for any other reason that they don’t wish to participate in retransmission consent negotiations, then the doctrine of “must carry” allows local broadcasters to require cable operators in their local markets to carry their signals.  However, if broadcasters choose to assert must-carry rights as opposed to the retransmission consent option, then they forego compensation from the cable operators forced to carry their signals. 

Ultimately, American consumers end up paying the price for these anachronistic regulations through higher prices and fewer available options.  They also suffer in the sense that those artificially higher prices divert dollars that could otherwise have been directed toward infrastructure improvement, expansion to underserved areas or capacity augmentation. 

So what’s the solution?  The same one that has allowed other forms of telecommunications and technology to flourish as they have:  deregulation and freeing up the market. 

Government simply should not be in the business of picking winners and losers or tilting the playing field in any industry.  But that truism particularly applies to the rapidly evolving telecom and entertainment fields, and especially when the prevailing regulatory structure is over two decades old.  Repealing retransmission consent and must-carry regulations would level the negotiating playing field for freer negotiation between broadcasters and cable operators in the same way that negotiations with non-broadcast channels like AMC already occur. 

Furthermore, piecemeal reform will not suffice because none of these one-sided regulations work in isolation.  Only comprehensive deregulation of the television market can allow the various players – creators, broadcasters, service providers and consumers themselves – to finally engage in free negotiation on an even playing field, ultimately leading to more optimal outcomes for everyone. 

These are not wild or revolutionary concepts.  Just two years ago, then-Senator Jim DeMint (R – South Carolina) and Representative Steve Scalise (R – Louisiana) introduced the Next Generation Television Marketplace Act in both the House and Senate.  That bill would have repealed provisions within the Communications Act mandating the carriage and purchase of certain broadcast signals by cable operators, satellite providers and their customers; repealed the Act’s retransmission consent provisions and the Copyright Act’s compulsory license provisions; and repealed ownership limits over local media operators, which currently prevent media enterprises from evolving to survive today’s competitive market. 

The need to enact those reforms has not diminished.  To the contrary, ongoing government interference into the relationships between independent parties doesn’t boost efficiency or choice, it inhibits them.  Only by setting a new, freer market norm can we reduce the sorts of headaches that threaten too many American consumers under the current regulatory scheme. 

That solution is straightforward and mainstream, but it requires American voters to demand reform from their Senators and Representatives.  The alternative is more blackouts, more standoffs, higher prices and inferior service. 

Notable Quote   
 
"Senate Majority Leader Chuck Schumer's attempt to cement the Biden-Harris administration's labor agenda deep into President-elect Trump's second term suffered a notable defeat Wednesday afternoon after two ex-Democratic senators helped tank a controversial labor nominee. ...Sinema and Machin's decision to vote with Republican senators to block McFerran's renomination could be the duo's last break…[more]
 
 
— Adam Pack, Daily Caller
 
Liberty Poll   

RFK Jr. believes that elements of the CIA were involved in the assassination of his uncle, President John F. Kennedy, in 1963, and wants further investigation. What do you believe?