US free-to-air market up in the air
Iñaki Ferreras ©RapidTVNews | 22-12-2011 The U.S. Congress has introduced the Next Generation Television Marketplace Act, which, if passed, would repeal the compulsory licence, must-carry, retransmission consent and local broadcast ownership limits placed on cable, satellite and IPTV companies.
The immediate effects of the legislation would be notable. For one, pay-TV operators have argued for months now that the content companies have been holding their programming hostage, threatening blackouts and encouraging customers to switch TV providers if they don't consent to big increases in carriage fees that are out of line with what the market can bear. They have looked to the FCC to take up the issue.
Under video deregulation, pay-TV operators would no longer be required to carry free-to-air channels like FOX, ABC, NBC, PBS and CBS. The ugly retransmission disputes that have threatened blackouts to consumers would come to an end, but cable customers would no longer be guaranteed local affiliate feeds.
A second clear effect wold be the removal of restrictions on the number of local affiliates that a pay-TV provider can own, meaning that a Comcast, for instance, could in theory own every local afiliate in a major metro, with big volume implications for advertising premiums, licensing deals and the like; opponents fear monopoly however and warn of a chilling effect on the marketplace of ideas should the rules be removed.
Reactions were mixed. The National Association of Broadcasters (NAB) 'respectfully' opposed the bill. "Current law ensures access to quality local news, entertainment, sports and life-saving weather warnings," the industry group said. "The proposed changes to the Communications Act strike at the core of free-market negotiations and broadcast localism, thereby threatening a community-based information and entertainment medium that serves tens of millions of Americans each day."
Predictably, broadcasters like satellite bastion DIRECTV were in support. DIRECTV, of course, has had its share of retrans fights. "DIRECTV applauds Sen. Jim DeMint and Rep. Steve Scalise for introducing legislation, the Next Generation Television Marketplace Act, to bring the television marketplace into the 21st century," its statement read. "This legislation would eliminate byzantine regulations that shackle innovation, competition and consumer choice. DIRECTV is eager to work with the congressmen to build support among their colleagues to pass this bill to modernise how Americans get their video content."
Vendors seemed to agree. “Today’s high-tech video marketplace is governed by a set of laws and regulations that are 20 years old," noted Matthew L. Dosch, senior vice president of external affairs at Comporium. "These outdated regulations are, in fact, stymeing innovation and harming consumers."
The modernisation, he added, will "inject true competition into the video marketplace, and protect consumers from rules that result in higher rates to cable TV customers.”
The authors of the bill issued their own explanatory statements. “Together, decades-old cable and satellite ‘compulsory copyright’ licenses and ‘retransmission consent’ regulations currently influence many aspects of the broadcast programming consumers watch on TV," Scalise said.
"The government should not be in the business of picking winners and losers, and the Next Generation Television Marketplace Act ensures that by removing the heavy hand of government, the market is free to operate in a way that continues to benefit consumers and encourage innovation.”
DeMint added that video deregulation is key "if we want to encourage innovation, job creation and consumer benefits."