Broadband Framework

Fix Cable TV

I read a recent article in the Wall Street Journal headlined "FCC Seeks Ways To Halt Blackouts In TV-Fee Fights" and I have some thoughts on the matter.

First off I am interested in seeing the FCC regulations or US code that allows for networks/stations to charge a fee for retransmitting their signal.

Since stations have been allowed to charge for retransmit, monthly cable bills have been rising out of control.

As I understand the retransmit for fee regulation, it allows a network who transmits the primary broadcast to collect a fee from the cable provider when they retransmit the broadcast to their subscribers.

The problem with this is, most cable channels never originate a primary broadcast to the community, national or local. The cable provider is actually originating the primary broadcast for these channels thereby making a retransmit fee not necessary.

Local networks broadcasting to the community would certainly qualify to collect a retransmit fee from the cable provider, however I feel that this practice should stop.

It is only a benefit to the local network to be included on the cable provider's channel lineup. Without this inclusion, the viewership for these local broadcasters would be diminished and ad rates would suffer.

As the local stations benefit from inclusion, so do the cable channels. Without the cable provider broadcasting their signals, the cable channels have nothing, no audience, no ad revenue. Their channel would not exist if not for the cable provider.

These retransmit fees should all be done away with, as the consumer is ultimately the one who pays and they have no say in the matter.

If the retransmit fees can not be done away with, then, Alacarte Cable would eliminate the problems of networks fighting over fees with cable providers.

Alacarte cable puts the consumer in control and makes the network have to ask the consumer to pay more for the channel in these fee fights. In fact, the channel is less likely to ask for an increase because it is much more transparent and they don't want to look bad in the eyes of their viewership.

Alacarte cable would also likely have an effect of reducing or eliminating the retransmit fees, as channels drop/lower them to attract more viewers. If a channel doesn't drop or lower their fee, then the consumer can choose to pay it or drop the channel.

Once the consumer can pick and choose which channels they want, the cable provider is just a utility, acting as a middle man for the networks. The consumer has the power and the channels have to compete.


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  1. Comment

    I see a couple of different points covered in your post. The first is, why do broadcasters charge the cable companies. The second is, use a la carte pricing to prevent network content black-outs from cable providers.

    The reason broadcasters want to be compensated for their content being on cable is the same reason cable-only channels want to be compensated. The cable company makes money by charging subscription fees to its customers. The appeal of the cable system is the variety of programs available on it. And cable customers insist that they want the local stations to be on that cable system, mostly for their TV network content, no doubt.

    So, the TV networks and local stations say, why should I not get a piece of that action too? If a cable-only network like HGTV can get so much per month from every cable customer, why should CBS or Fox give their content away for free to those same customers?

    I TOTALLY agree with your solution, though. But I doubt the cable companies would. If the local stations are provided by the cable company a la carte, then subscribers could opt out. This would give the local station (and the affiliated TV network) a really powerful incentive to keep their demands at bay. But you know what? The administrative costs to the cable system would go up, so cable systems have been fighting this a la carte idea. Still, I think this is the way to go, and make the marketplace regulate itself naturally.

    Or you can do what I do. Make yourself immune to this by using over the air TV signals. As long as the networks are happy to continue broadcasting free over the air (i.e. ad supported, with relatively low costs for the transmitter, compared with cable system costs), you're set. Combine that with Internet TV sites, and you should have all the TV you want.

    And if more and more people did this, I'll bet you'd see drastic changes to what kind of programs are made available over the air. But people, consumers, need to get some backbone first. If consumers continue to cave in, they'll never see any change in this state of affairs.