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Retransmission Consent: Fair, or Not?

Retransmission Consent: Fair, or Not?
Retransmission Consent: Fair, or Not?

foxbusiness.com

There is a ground swell of comments and opinions on how current Retransmission Consent provisions, enacted by lawmakers in 1992, have evolved into bloody battles between Pay TV operators and Broadcasters leaving consumers in the middle, while increasingly without programming at the most inopportune times. So most ponder, is this fair, or not?

Hindsight

It hearkens to that timeless adage and into a classic case of hindsight, that is, legislators perceived an inequity in Cable Operators control of the video market therefore leaving broadcasters “out in the cold” of  growing cable programming options, believing those operators were a monopoly, and decidedly went on to create Retransmission Consent to correct the problem. Does that sound familiar? It should.

Now with a continued growth of competitors in video markets in the form of DBS (Direct Broadcast Satellite) and OTT (Over-the-Top) programming, there is little evidence to dispute that the same laws created to help broadcasters are now working against the Pay TV industry. How is that for correcting a perceived problem, while creating another? Is this not the FCC’s reaction to proposed Net Neutrality concerns; create new laws to regulate an industry without clear evidence of any need to do so.

“With retransmission fees likely to top $1.3 billion by 2012, distributors will have to look to their customers to make up some of the difference,” he says. “And they will have to aggressively cut programming costs too.”

Charlie Segars, chairman Ovation TV: from Multi-Channel News See (Ovation Chief Says Retrans System Threatens Indie Nets)

Fair or Not

Inequities abound due to now outdated legislation. Consumers are caught in the middle of feuding companies simply because the free market system has been hijacked and left on “the side of the road”. Pay TV operators are desperately trying to control programming costs while Broadcasters are making up for dwindling ad revenues using vertically integrated programming as a hostage tool. This has to be a clear and concise lesson in competitive markets and why they should be left alone and to their own devices. The market usually works these issues out in a fair and competitive market system.

“Broadcasters retain their monopoly status in the local market because FCC rules prohibit pay TV providers from obtaining broadcast programming from an alternative source. As a result, broadcasters have grown bolder in their demands because they know that they can survive just fine without continuous carriage on any one of the competing distributors in their local market. If a broadcaster withholds or threatens to withhold its signal, the ability of a viewer to switch pay TV providers virtually assures that the distributor will ultimately give in to the broadcaster’s financial demands.”

Former Rep. Jack Fields: from The Hill See (Fix broken broadcast Retransmission consent system)

Arbitration

Either current laws will have to be changed to correct the original regulation of the industry or companies will need to subject their quarrels to arbitration. What else can be done? An inequity has been created and now should be corrected. This should serve as a warning to lawmakers, that direct interference in markets does not create fair and competitive prices; it only serves to favor one competitor over another, and that is neither a free market system nor true competition.

Retransmission Consent: Fair, or Not?
Retransmission Consent: Fair, or Not? Leonard Grace (270 Posts)

Founder of Broadband Convergent, a Broadband-Mobile-Cable-Wireless-Telecom market website focused on highlighting industry news and strategic issues within technology arenas. Highly researched and experienced insights and trends both inform and enlighten readers on current industry convergence of Broadband-Cable-Mobile-Wireless and Telecom Sectors.

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