Broadcasters seek FCC regulation of streaming providers

Broadcasters in the United States are now petitioning the FCC and Congress to regulate streaming platforms like YouTube TV, potentially driving up costs for consumers. You can learn more in my latest video.

At issue here is the retransmission negotiation dynamics between broadcasters and streaming providers. Unlike cable services, streaming services currently negotiate content fees directly with networks rather than local affiliates. This means local channels like your ABC or NBC affiliates must go through their national networks for re-transmission fees, which they believe sells them short. By contrast, federal law requires that cable providers negotiate directly with local broadcasters.

Even without this regulation the costs of streaming TV services have surged over the years, very much in line with the increase cost of cable. Take YouTube TV, for instance; what started as a $35 monthly service now costs $73. This hike is largely attributed to the rising costs of content—networks charge more, so streaming services must adjust their fees accordingly.

Opposing the local broadcasters are the streaming providers who have joined forces with the broadcast networks. Both sides have created astroturfed websites complete with .org URLs. The broadcasters founded the “Coalition for Local News” in an effort to appeal to members of Congress who like to see their faces on TV, and the streamer/network alliance launched their consumer focused “Preserve Viewer Choice Coalition.”

With both sides poised to fight fiercely, a negotiated compromise might be the path forward, though this, too, will likely lead to higher costs for consumers. The looming question is whether consumers will reach a tipping point, opting to cut not just the cable cord but the streaming one as well.