In summary, the line item Off-Air Charges on your bill reflects what we are charged to rebroadcast ABC, CBS, Fox and NBC. This fee is a amount that is imposed on all video rebroadcasters such as cable and satellite television providers. This fee is based on what the Programmer such as ABC, CBS Fox or NBC values their content at, and historically demand large increases yearly. These same program providers will not allow a ala-cart option and demand a all or nothing approach. Sister Lakes Cable understands that these rates seem unfair and we have attempted to negotiate a better deal, and have been met with a unwillingness by the programmers to reduce or maintain rates from the prior 3 year agreement. Below you will find the laws and the background to this fee.
Laws Behind Retransmission Consent
Since the 1960s, the Federal Communications Commission had established must carry rules, which required cable television operators to carry all significantly viewed local stations.
Congress passed the 1992 Cable Act, which established a combination of must carry and retransmission consent provisions. Stations were given the right to either require cable operators to carry their signal at no cost, or negotiate with cable operators for carriage fees that the latter could refuse.
If a broadcaster elects retransmission consent, there is no obligation for the cable/satellite system to carry the signal. This option allows broadcasters who own stations, including those affiliated with major networks such as CBS, NBC and ABC or Fox to request cash or other compensation from cable/satellite providers for signals. Initially, stations usually attempted to gain further distribution of cable/satellite services and/or co-owned low-power television stations in which they also hold an equity position rather than direct cash compensation, which cable/satellite systems had almost universally balked at paying. However, in the mid-2000s the stations succeeded in earning carriage fees from cable/satellite systems.
In some cases, these channels have been temporarily removed from distribution by systems who felt broadcasters were asking too steep a price for their signal. Examples include the removal of all CBS-owned local stations as well as MTV, VH1 and Nickelodeon from Dish Network for two days in 2004, the removal of ABC-owned stations from Time Warner Cable for a little under a day in 2000, and the removal of all Hearst Television local stations from Time Warner for more than a week in 2012.
In the U.S., retransmission consent has often been chosen over must-carry by the major commercial television networks. Under the present rules, a new agreement is negotiated every three years, and stations must choose must-carry or retransmission consent for each cable system they wish their signal to be carried on. Non-commercial stations (such as local PBS stations) may not seek retransmission consent and may only invoke must-carry status.
Initially, cable carriers’ reaction was to refuse to pay for broadcast programming. John Malone, head of cable giant TeleCommunications Inc. refused to pay to carry broadcasters’ content saying, “I don’t intend to pay any money … I will scratch backs. Instead of monetary payment, some broadcast networks agreed to distribute secondary channels. America’s Talking (now MSNBC), FX, and ESPN2 all originated through retransmission consent deals in the early 1990s. Many PBS stations received additional local channels. However, in the mid 2000s the stations succeeded in earning carriage fees from cable/satellite systems.
Legislation governing the retransmission of broadcast television content by satellite companies is required to be renewed on a regular basis. Typicaly this renewal is on a every three year renewal. As of 2021, the legislation has been enacted five times. These acts renewed statutory licenses that allow cable and satellite TV companies to retransmit broadcast stations to their customers.
Retransmission consent has drawn criticism from the cable operators who redistribute programming, and therefore must seek consent from the broadcasters for their program content. Cable programmers have argued that there is a “shift in leverage toward broadcasters” within the market since introduction of retransmission compensation.
Broadcasters typically claim that the programming they provide costs money, and these retransmission fees allow them to provide this expensive programming. Further, the Cable Act created retransmission consent in order to fix a market imbalance and the marketplace and contract disputes should be addressed in the marketplace.
Cable operators typically claim during a carriage dispute that the broadcasters are forcing the viewing public to pay for content that is essentially given away for free to those who use an antenna to receive the station.
Alternatively, broadcasters have argued that the free-market approach discourages carriage disputes. In a 2013 op-ed, former FCC commissioner, Robert McDowell, argued:
TV stations make more money as more people see their shows, thus creating an incentive to distribute their product as widely as possible. These same market forces also create a disincentive for broadcasters to withhold their signals from distributors like cable and satellite companies.