Broken Promises: Retransmission Consent is a “Network Issue”

When broadcasters lobbied Congress to create retransmission consent, the fees pay-TV companies levied for carriage, they made a promise. They’ve broken it.

In an October 7, 1991, letter to MPAA President Jack Valenti from Edward O. Fritts, President and CEO of the NAB, Fritts made one thing plain. “Retransmission consent applies only to local television stations, not to the television networks,” he said. “The television networks will not play a role in negotiations between local stations and local cable systems.” An accompanying NAB memo confirmed this, stating: “[R]etransmission consent is not a network issue.”

However, this promise didn’t last. Networks are desperate for skyrocketing retrans fees and willing to hurt their affiliates to get them. As the Wall Street Journal reported Wednesday: “This is bad news for stations.”

CBS recently shifted its Indianapolis signal from WISH-TV to WTTV-TV because the former refused to provide “reverse retransmission consent” fees. CBS President and CEO Les Moonves has made his position plain as day. “We actually are now calling it a program fee, which is a more appropriate term to acknowledge that,” he said. “And that 50-50 no longer is even a base that we use. We decide what we think is fair…It generally is higher than the 50% number. And we negotiate on that basis.”

This unfriendly environment isn’t lost on local broadcast stations. A group of Fox affiliates recently met in Dallas to discuss the networks increasingly aggressive reverse retrans demands. Unsurprisingly, the national networks weren’t invited.

Retransmission consent was sold to Congress as a tool to cultivate localism and help affiliates. Now local stations are being gobbled up by TV groups and money flows back to the networks. Only half of stations show local news, and most of it is syndicated content: About as local as Pizza Hut.

Retransmission consent is a “network issue.” By updating the rules, we can shift the focus back to localism. Through proposals like “local choice”, we could see community-based programming and news thrive. That would be a win for everyone.

Consumers deserve better than more broken promises from broadcasters.  Let’s fix this system and move TV into the 21st century.

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