Take one look at the recent quarterly earnings statements for the nation’s biggest broadcast TV companies, and one thing is certain: retransmission fees have become a major revenue source.
Is that a good thing? That’s perhaps the crux of a Digital Policy Institute webinar scheduled for Thursday, July 27, at 11am.
Retransmission fees were introduced as part of the 1992 Cable Act as the focal point of a new approach to the relationship between local commercial broadcast TV stations and what are today considered multichannel video providers (MVPDs).
Under the terms of the Act, every three years local stations, licensed to provide programming attuned to the needs and interests of communities within their over-the-air service areas, could choose one of two options:
- Traditional “must carry,” where their signals simply would be carried by MVPDs
- “Retransmission consent,” where an MVPD only could carry that local commercial station if the parties reached an agreement.
As the Digital Policy Institute sees it, the congressional intent in passing that portion of 1992 Cable Act was to further the long-standing concept of “broadcast localism” and to better ensure that local stations – licensed by the FCC to serve the local public – had the financial resources to do so in an era of increasing video competition and choices for the viewing public.
But, is that 1992-created system still achieving its stated goal?
The institute argues, “For more than two decades we’ve seen significant escalation in the prices paid by MVPDs to carry TV stations choosing the retrans option, as well as revised network affiliation agreements now tending to shift the bulk of these retrans fees from local TV stations to the programming networks with which they are affiliated (and sometimes owned). Many television markets have been the sites for highly-publicized ‘games of chicken’ and viewer angst where local stations and MVPDs could not reach prompt agreement, leading to sometimes lengthy station ‘blackouts.’”
There’s also the danger of having a potentially profit-generating retransmission agreement backfire, as was the case with Liberman Broacasting’s Estrella TV Spanish-language television network. Opting to go the retrans route and not select a “must carry” option, the network ended up getting dropped in early 2015 by Comcast systems in Houston, Denver, and Salt Lake City.
So, what’s the legislative and regulatory future for retransmission consent in an era of new television platforms, changed business models and levels of video competition far different than existed in 1992?
With the Congress and the FCC giving priority to wide-ranging legislative and regulatory reform, is retransmission consent a likely target? If so, how will the public’s interests best be served by any changes?
These questions will be addressed by panelists that include Kagan/S&P Global Market Intelligence Sr. Research Analyst/Broadcast Media Justin Nielson, Competitive Enterprise Institute Research Fellow and Regulatory Counsel Ryan Radia, and Phoenix Center for Advanced Legal and Economic Public Policy Studies President Lawrence J. Spiwak.
Serving as moderator is Barry Umansky, Senior Research Fellow and Senior Policy Advisor for the Digital Policy Institute at Ball State University in Muncie, Ind.
To register, click on the Eventbrite link provided by the Digital Policy Institute: