The 1996 Telecom Act and retransmission consent

The Telecommunications Act of 1996 turns 21 today.  If it were a person, it would now be an adult.  It could even buy a beer.  So today is a good day to toast the Act and look back at how much it has accomplished—and one area in which it has led to some unintended consequences.

The American Television Alliance, includes cable operators, satellite carriers and telephone companies among its members.  It couldn’t have existed in 1995.  Back then, it was illegal for phone companies to offer television service.  The Telecom Act of 1996 changed that.  Nearly every American today can choose between multiple providers—all of whom now compete for your business.   

{mosads}While the ’96 Telecom Act created competition among pay-TV providers, it left intact outdated, legacy regulation in the broadcast space.  Most importantly, Congress left in place retransmission consent rules that allow broadcasters to charge pay-TV providers to deliver signals to viewers—even if those same signals are free over-the-air.  And it left in place other legacy regulation preventing pay-TV providers from obtaining network programming from anybody other than the affiliate assigned to a viewer’s “local market”—even if an out-of-market station is willing to sell that same programming at a lower price.  This regulation gives broadcasters a virtual monopoly over “must-have” news, sports and entertainment.

What happens when you combine outdated regulation on the broadcast side with competition on the pay-TV side?  Negotiations that bear little resemblance to a “marketplace.”  Pay-TV providers need individual broadcasters if they want to provide their viewers with network content.  Yet broadcasters don’t need any individual pay-TV provider.  If a pay-TV provider loses broadcast programming, its customers will simply switch to another pay-TV providers.    

The result is a disaster for the American viewer.  Retransmission consent fees go up as much as forty percent every single year.  Analysts expect them to reach $11.6 billion by 2022, with no end in sight.  This money comes straight out of Americans’ pockets.  Worse yet, blackouts have become common.  Since New Year’s day, for example, broadcasters have blacked out their signals to more than 15 million Americans.  

Given the speed and transformative nature of today’s technology, many in Congress are thinking about ways to improve the 1996 Telecom Act.  Some even want to rewrite it for the digital age.  Retransmission consent—and other legacy regulations tilting the playing field in favor of broadcasters—must be part of those discussions. 

Mike Chappell is Executive Director, the American Television Alliance

The views expressed by this author are their own and are not the views of The Hill.