A panel of industry experts discusses an important consumer advocacy issue on behalf of the American Television Alliance on Capitol Hill.
If you don’t know what “retransmission consent” is, don’t worry, you’re normal. Unless you’re a Washington, D.C. policy wonk, you’ve probably never even heard the term before. However, if you own a television, or own or work in a business that depends on local advertising, you should get an understanding of this issue, because it affects you.
Background and importance
A couple of decades ago, Congress decided it was in the best interest of the public to guarantee that local TV programming be carried on all cable, satellite, and other carriers. The concern was that, without this policy, local content such as news, emergency information, and local programming may not continue to be available to consumers.
After two decades, the television and business climates have changed tremendously, yet the same regulations still apply. Twenty years ago, there was no competition to the cable company, whereas today there are two and sometimes three other video providers in every market. Meanwhile, power has shifted into the hands of national broadcast networks, allowing them to dictate terms to cable, satellite and telephone companies that carry local broadcast signals. Often, the broadcast networks seek enormous fees from cable, satellite and telcos. If those fees are not met, networks can instigate “blackouts,” a term you are likely to have heard of as they have affected millions over the last couple of years.
Today the networks have an uneven advantage as they hold “all the cards” in negotiations. Local programming currently is legally required to be carried and this programming can be withheld by the networks or “blacked out” without repercussion.
Imagine having paid your monthly cable or satellite bill and, through no fault of your own, the largest sporting event of the year disappears from your screen. Now imagine important local information, perhaps even during an unexpected emergency situation, is to be broadcast over those “blacked-out” airwaves. You won’t be a very satisfied or informed consumer.
Negotiation tactics that lead to blackouts adversely affect local and national businesses, as well. If you are a small or burgeoning business, revenue could easily decrease if your marketing dollars are not used as efficiently as anticipated as a result of a blackout, thus unnecessarily affecting businesses’ bottom line.
And who gets the blame for “blackouts?” Clearly, your local cable or satellite provider is much easier to reach than NBC’s complaint department (trust me, I tried).
What the experts think
That leads us to the reason behind the expert panel discussion put on in front of an overflowing crowd of Congressional staffers, think-tank representatives, and members of the media by the American Television Alliance (www.americantelevisionalliance.org).
The panelists provided summaries of their research, which, when combined, provided a glimpse into some of the flaws behind policies that currently exist at the Federal Communications Commission (FCC).
Thomas Hazlett, an Economist at George Mason University and former Chief FCC Economist, provided insight into the current regulatory environment setting aside billions of dollars’ worth of public spectrum and other regulatory benefits for broadcasters, and how it impedes innovation and blocks alternative distribution systems necessary for a free economy to advance.
Philip Napoli of Fordham University’s Graduate School of Business buttressed Hazlett’s argument with his own research, showing that, while retransmission consent fees were supposed to support local programming, that programming has declined while retransmission consent fees have skyrocketed.
Despite their varied research backgrounds, all of the panelists agreed that significant changes to policies in Washington, D.C., are needed.
What should Washington do?
Although there is no true consensus on which policies will best allow for a fair, competitive marketplace for broadcasters, video programming distributors, local businesses and consumers, it is clear that awareness of the issue is just the beginning of the process.
But in time, and with enough support, regulators in D.C. just might implement much needed changes to an outdated policy that affects everyone, whether or not you’re aware of it.