Modern Television Laws Can Prevent Blackouts | Citizens Against Government Waste

Modern Television Laws Can Prevent Blackouts

The WasteWatcher

Television retransmission disputes, which lead to various broadcast blackouts, tend to get ugly before they get better.  There are currently two retransmission disputes affecting service on DirecTV. Nexstar stations are being blacked out on DirecTV in 100 cities across the country, and CBS on DirecTV is being blacked out in more than a dozen cities, including Chicago, Los Angeles, New York, Sacramento, and San Francisco. 

The blackouts occur because Congress has failed to update the telecommunications laws.  The Cable Television Consumer Protection and Competition Act of 1992 (P.L. 102-385), also known as the 1992 Cable Act, prohibits cable operators and other multichannel video programming distributors (MVPDs), which now include satellite and fiber optic networks, from rebroadcasting or “retransmitting” commercial television, low power television and radio broadcast signals without first obtaining the originating broadcaster’s permission.  This legislation was enacted following deregulation of the cable industry, when cable rates increased due to lack of competition in the marketplace. 

Twenty-seven years later, competition in the video distribution marketplace is thriving, yet these rules still exist, forcing multi-channel video programming distributors (MVPD’s) to continually negotiate with broadcasters for permission to provide content to their customers.

The Cable Act has had unintended consequences, as television viewers encounter network blackouts and increasing subscriber prices following final agreements due to the high costs demanded by content providers for retransmission consent agreements.  These blackouts have led to subscribers missing major events such as portions of the Oscars and the New York Knicks games in 2010; loss of local CBS and NBC programming in North Dakota in 2012; and a temporary loss of access to local Fox stations in Minnesota and North Dakota in April 2012.  Prior to the DirecTV retransmission disputes, viewers missed the U.S. Women’s National Team’s World Cup victory and Fourth of July celebrations in 97 markets nationwide beginning on July 3.

The law governing distribution of television content must be updated so that content providers and distributors should be able to work together rather than being pitted against each other over rate disputes based on how television was viewed in 1992, long before streaming video and other methods for watching programming evolved.  When carriage negotiations flounder, the default position has been media blackouts, which not only creates animosity between the companies negotiating for retransmission rates, but harms television viewers across the country.  This isn’t a problem caused by one company or another.  The law is simply failing to protect consumers. 

The escalation of retransmission rate disputes does a disservice to both content providers and MVPDs due to consumer dissatisfaction stemming from loss of access to desired viewing.  

A legislative correction of the retransmission consent scheme is long overdue.  

Thankfully, Reps. Steve Scalise (R-La.) and Anna Eshoo (D-Calif.) have introduced H.R. 3994, the Modern Television Act of 2019.  This much-needed legislation recognizes the changes that have occurred in the video marketplace by eliminating outdated 1992 Cable Act requirements like retransmission consent, compulsory copyright licenses, and several other outdated statutory provisions and regulations, allowing for free-market contract negotiations to occur under traditional copyright law.  The legislation also creates a new process for binding arbitration, which will prevent blackouts by requiring broadcast signals to be maintained throughout negotiations and ensuring that copyright holders are paid for their content during the process.  H.R. 3994 will allow small- and medium- sized cable operators to participate in buying groups, allowing smaller competitors to band together in negotiations for programming, which will lower costs for consumers.

The Modern Television Act of 2019 updates the telecommunications laws to accommodate and invigorate today’s video marketplace, while protecting consumers against future media blackouts.  

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The WasteWatcher: The Staff Blog of Citizens Against Government Waste