By Holly Wilson
As Congress returns to Washington and a new Trump Administration sets up shop, free-market advocates and legislators have a long to-do list. Once Congress gets past the essentials – passing the REINS Act, repealing Obamacare, undoing a litany of executive orders and last minute Obama administration regulations and more, there’s still a lot of work to accomplish.
One area that must be prioritized is television market deregulation. Technology has changed rapidly over the past few decades, but our legislative and regulatory framework has been slow to respond. The result is a web of out-of-date rules and limitations that govern how television providers operate and provide services to you, the consumer.
Representative Steve Scalise has long advocated for comprehensive change in this area, introducing bills in several Congresses and we are eager to see him introduce this legislation again. His aim is to limit the role of government in the industry, clearing the way for robust development, growth, and innovation, which ultimately improves the user experience.
While many reforms are needed, most recently the need for an overhaul was showcased over New Year’s weekend, with many cable customers experiencing blackouts of bowl games and other prime content featured on local networks – an increasing problem in recent years. All because local broadcasters wanted more compensation for permission to rebroadcast their signal (which is actually free over the airwaves) and current law allows them to pit cable providers against each other, holding their content hostage for ever increasing sums of money.
Since 2010, blackouts have occurred in 698 markets and since 2005 retransmission fees (what cable companies must pay to local broadcasters for their content) have increased 22,400 percent. Yes, you read that right – 22,400 percent. These costs are ultimately passed on to the consumer – a double whammy for those who also experience these blackouts.
Why is this happening? Because the retransmission consent rules put in place as part of the Cable Act of 1992 do not allow true free-market negotiation. The current rules were written during a time when local broadcasters usually only worked with a single cable provider in an area, so the incentives to reach agreement were mutual.
Now, if a provider refuses to pay exorbitant fees, local broadcasters cut off access until their conditions have been met. Local broadcasters know that their content will be available through other providers, which creates enormous pressure for cable providers to pay up since they are not even permitted to enter negotiations with affiliates in neighboring markets due to non-duplication rules.
The current rules and regulations governing television markets are outdated and punish the consumer rather than create incentive for a fair negotiation of compensation for content. It’s time for change. If we want to encourage growth, innovation, and a better consumer experience, we need new rules for a new time.
By Holly Wilson