TV broadcasters are touting an FCC report showing cable bills are rising, hoping nobody notices they’re the reason.
The four major broadcast networks own much of the national television programming, which includes local TV stations and the most expensive cable networks. In fact, half of the top 50 most expensive cable channels are owned by the Big Four broadcast networks.
The average consumer will pay $37.30 for the top 50, and nearly half — $18.60 – will go to the Big Four. And that’s only for the broadcasters-owned cable networks.
Cable customers are also required by the government to pay for local TV stations that are “free” over-the-air. In the last eight years, broadcasters have raised retrans rates for these “free” stations at 119 times the rate of inflation. Over the next five years, they will take in nearly $25 billion for these stations.
It’s troubling that government requires carriage of anything in a free market. And it’s problematic that broadcasters aren’t prohibited from “tying” expensive cable networks to the local TV stations that cable companies must buy.
This combination of government-mandated local TV stations and tying to cable networks is driving up rates. It will continue until Congress updates our video rules.
Here’s how retransmission consent works:
1) The national networks spend more money on programming, primarily sports.
2) Local TV stations, usually owned by large TV groups, demand higher retransmission consent rates from pay-TV operators to foot the bill, known as “reverse retransmission consent.” Retrans revenues are supposed to be used on local content and public affairs rather than network programming.
3) Pay-TV companies have no choice but to pay these exorbitant increases, or risk a blackout that angers customers.
TV broadcasters are never held responsible for raising rates on their local TV stations or cable channels.
Consumers don’t blame the local gas station when oil prices drive up gasoline. They shouldn’t blame the local cable company when the fault lies with the companies who control programming.
If you’re frustrated by high prices of cable, simply contact Congress here and ask them to fix “retransmission consent.” Tell them consumers deserve TV laws that don’t lead to blackouts and high prices.