TV station blackouts, less local TV news call into question FCC rules
By Phillip Napoli, Fordham University’s Graduate School of Business
December 22, 2011
As the year winds down, TV viewers across the nation are in danger of losing their local broadcast stations thanks to disputes over retransmission consent fees. These are the fees that cable and satellite companies pay to local stations to carry the stations’ signals on their systems. In recent years, as the negotiations have become increasingly combative, viewers have faced blackouts, or threatened blackouts of those local stations.
This year there have been blackouts in more than thirty markets. Earlier this year, one broadcaster even pulled the plug on a local station in the Gulf Coast, depriving viewers of critical news and weather updates as Tropical Storm Lee approached thousands of homes. These tactics raise significant questions as to whether the public interest is actually being considered and served.
In the wake of these ongoing disputes, the FCC is reviewing its retransmission consent regulations, which were mandated by the 1992 Cable Act. Broadcasters argue that the fees are integral for maintaining local programming on the air. In fact, that was the whole basis for the legislation in the first place – broadcasters maintained that they were public trustees, serving local informational needs, and needed to maintain economic viability and wide accessibility. Retransmission consent fees would provide these broadcasters the financial capacity and stability to continue providing the public with critical local programming.
Nearly two decades later, the retransmission consent regulations are still in place, and the payments that they generate are now a massive source of revenue for broadcasters. In 2006, broadcasters pocketed $216 million in retransmission fees. This year, that number skyrocketed to an estimated $1.3 billion. Given this substantial increase, one would assume that local programming would have benefited. The contrary appears to be true.
In multiple studies, researchers have found that local news and programming has markedly dwindled over the past decades. A study by the FCC this year found that television stations provide on average less than 1.5 hours of local public affairs programming per week. Commercial stations that provide absolutely no local news programming are increasingly prevalent, as are stations that merely replay the local news broadcasts of other stations in their market. Additionally, financial and personnel resources devoted to local news and public affairs have dropped significantly in recent years. No matter how it’s measured, broadcaster commitment to localism through local news and information programming hasn’t kept up with skyrocketing retransmission payments.
Instead of supporting local programming, retransmission fees now seem to be going straight to the bottom line of the Big Four broadcast networks (ABC, NBC, CBS and Fox). NBC, for instance, is seeking 50% of all retransmission consent revenues obtained by its local affiliates.
The FCC must take note of this significant disconnect between retransmission revenue and local programming. Despite serving as an increasingly significant revenue source for broadcasters, retransmission fees are not accomplishing Congress’ original goal of serving the informational needs and interests of local communities.
Napoli is a professor and department chair at Fordham University’s Graduate School of Business. He is also the Director of Fordham’s Donald McGannon Communication Research Center.
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