A recent FCC rule proposal has sparked significant debate between broadcasters and cable companies over retransmission fees. This proposed ruling, initially intended to require customer rebates when local channels are pulled from a lineup, has evolved into a contentious issue with potential implications for the ATSC 3.0 transition and the desire of broadcasters to encrypt their signals. You can learn all about it in my latest video.
The scenario contemplated by the proposed ruling is becoming more and more common as broadcasters continue to raise their rates and cable companies are pushing back and pulling local channels from lineups. Consumers, who continue to pay their cable bills despite losing access to these channels, are left footing the bill while providers potentially profit.
An executive order from the Biden Administration aimed at addressing such consumer issues has led to this and other similar actions across many industries. A recent high profile example involves the FTC’s recent actions against Adobe for hidden fees and restrictive cancellation policies.
Cable companies, predictably, oppose the FCC’s proposed rule. Verizon and other industry players argue that the rule could harm consumers by giving broadcasters additional leverage in negotiations. The National Cable & Telecommunications Association (NCTA) claims that calculating the cost of carrying networks is complex, despite many providers like Comcast providing itemized fees appearing on customer bills.
Dish Network’s response stands out, proposing reforms to the retransmission consent process while also opposing the FCC’s proposal. Dish highlights that many broadcasters demand carriage of additional, non-broadcast channels they own as part of the agreement to carry local affiliates. Dish also suggests allowing cable providers to import out-of-market signals as a leverage tactic and advocates for a la carte pricing to save consumers money by letting them choose their own lineup.
The Dish Network filing offers a window into what is usually hidden from consumer and government oversight. The carriage and retransmission agreements between broadcasters and cable distributors are always done in private without any involvement or oversight from consumers or government regulators.
Broadcasters counter that pay-TV providers never pass along savings to consumers. They argue that government intervention is unnecessary, as private negotiations should dictate terms. Dish rebuts by pointing out the dramatic increase in retransmission fees, which have surged by 2,600% since 2009, far outpaced inflation and economic growth.
A critical aspect not discussed in this debate are consumers’ ability to receive free over-the-air TV using antennas. Broadcasters are complicating this with the new ATSC 3.0 standard by encrypting signals, which necessitates specialized, licensed equipment. This move seems aimed at pushing consumers towards paid cable subscriptions.
Efforts are underway to oppose this encryption. A significant number of consumers have filed comments with the FCC and signed my petition urging the FCC to ban encrypting free over the air television.