The Broadcaster's Bargain
Since the earliest days of television, broadcast stations – NBC, ABC, CBS, Fox have been granted free use of the public airwaves by law. That’s a public subsidy worth billions of dollars. In exchange, the only obligation broadcasters must meet is to serve the public interest. More than 60 years later, the public subsidy continues, but the public interest side of the bargain is too often ignored.
Because of an old TV law called “retransmission consent,” cable and satellite companies are required to carry local broadcast stations, and broadcasters insist customers pay for them. Because of these outdated regulations that give TV stations a local monopoly, broadcasters often threaten to black out their signals on cable and satellite, even though their programming remains available for free over-the-air with an antenna, and online.
For more information on how retransmission consent contributes to rising monthly cable bills, visit: http://www.americancable.org/issues/tv-ransom/
When the blackouts finally end, consumers get their programming back, but at a higher cost:
- SNL Kagan projects that, over time, 50% of broadcast TV affiliates’ retransmission consent payments will go to the networks rather than pay for local programming.
- SNL Kagan’s data shows that retransmission consent fees are the fastest rising part of programming costs.
- Retransmission consent fees have grown an astonishing 27,400% since 2005 and more troubling, have seen 40% annual increases over the last three years.