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.

View online here.

All press inquiries should be directed to Mike Heimowitz at michael.heimowitz@porternovelli.com.

Comments are closed.

  1. Dorothy

    The fcc needs to do something to make it affortable for everyone to have the channels they need and want and not be dictated what they can have when alot of people live in one area which is goverened by local calling area but they live in an area that needs another area. For example I live in the southern part of PA, which would make it a Philadelphia channel area but my school is in Lancaster county so I need a Lancaster county area for school closings, weather and road conditions. Also they took away the Baltimore channels which friends/family work in and need the Baltimore channels for wheather and road conditions. The cable companies are making a big profit off the little guy which in this time of recession/depression people can not afford but need certain channels to servive and now they can not get what they need. It is going to come to a point where everyone will get the converter boxes and an antenna to get digital service and do away with the high expense of cable if they can not get what they want and need. The cable companies are getting too much profits for what little service they provide. The bills keep going up and we are constantly losing channels and they are not replacing them with another channel. Something has to be done to help the little guy out and not always be for the big organization who are not helping the little guys out. The big companies are not hiring to help out our economics and giving raises they are only interested in making money. They do not care who they are hurting they are only worried about themselfs. Something has to be done to help out the low income because there is no middle class anymore you only have different levels of lower class. Because if you get a job it is mostly minimal wage which you can not live on, if you can get full time job at all let alone get health benifits which everyone needs and alot of people can not get state assistence because they work and if the job does offer benifits it is so high that they can not live off the salery left after the benifits even working more than one job. Something has to be done and it is up to you to check into this and make it right for everyone not just the big organiztions.

  2. Isaac Bowman

    Saturday morning Dec 31, 2011 we watched WGAL channel 8 (Lancaster, PA.) Saturday evening We could not get WGAL on our TV. We called Armstrong Cable (our cable company} We were told this is a redistricting move by the FCC. WGAL 8 is located in Lancaster, PA. (about 30 miles from us) It has been the prefferred source of Local news in our Area. Today If we want to get news and weather information we must watch a Station in Philadelphia, PA or Baltimore, MDboth cities are about 55 miles from us. The news they broadcast covers the cities quite well but they don’t do much for our local area. What can be done about this?

  3. Stephanie DeMott

    I am increasingly disappointed with what our “government” is doing to the people it it supposed to be representing. I would like to continue viewing my “local” station WGAL from Lancaster, but am now blacked out because of this retransmission fee debacle. All because of the almighty dollar. Why am I not surprised?

  4. Eddie L. Henry

    I live in Delta, south central Pennsylvania. For years Armstrong has been broadcasting tv channels out of Baltimore, Maryland. WJZ, WBAL are popular channels that carry programing of interest to me. I am a Baltimore Ravens fan. The FCC has required our company to carry channels based out of Philadelphia. I have no interest in channel information a half a state away from where I live and I want our regular channels put back. I know I am only one lonely voice but I am sick of idiots dictating what I can and cannot watch who have no interest in my area. Do whatever is necessary to put Baltimore markets back on Armstrong. Thank you Eddie L. Henry

  5. Linda Laslavic

    As of December 31, 2011 we lost all of our Youngstown stations and two of our Pittsburgh stations. Channel 4 (WTAE ABC) and Channel 53 (WPGH). I pay Armstrong $189.72 per month for TV, internet and phone and we do not have a luxury package we have basic and now they have taken away the channels we most used. Why? We live in an area that our weather comes out of North & West yet we cannot get these reports.