Broadband Cable Association of Pennsylvania

Issue Briefs

Retransmission consent

The Communications Act prohibits cable operators and other multichannel video programming distributors from retransmitting commercial television, low power television and radio broadcast signals without first obtaining the broadcaster's consent. This permission is commonly referred to as "retransmission consent." If a broadcaster elects retransmission consent, there is no obligation for the cable system to carry the signal; however, choosing this option allows broadcasting companies - who own individual stations that are local affiliates of NBC, CBS, ABC and Fox - to request cash or other compensation from cable or satellite providers for signals.

Alternately, local commercial and noncommercial television broadcast stations may require a cable operator that serves the same market as the broadcaster to carry its signal. A demand for carriage is commonly referred to as "must-carry." If the broadcast station asserts its must-carry rights, the broadcaster cannot demand compensation from the cable operator. While retransmission consent and must-carry are distinct and function separately, they are related in that commercial broadcasters are required to choose - once every three years, on a system-by-system basis - whether to obtain carriage or continue carriage by choosing between must-carry and retransmission consent.

Retransmission consent has often been chosen over must-carry by the major commercial television networks.

Until recently, the once-every-three-years negotiations between broadcasters and cable providers required by law were generally marked by an understanding of the mutual benefit enjoyed by carriage of local stations on cable. The cable companies were able to provide customers their favorite network shows and local newscasts, while broadcasters benefited from the superior picture and audio cable provides, as well as the wider geographic reach (and, thus, additional advertising dollars) brought by cable's expansive penetration. As a result, most agreements did not involve cash, but rather arrangements for free advertising time or a commitment to carry additional cable networks also owned by the broadcast network.

The FCC has repeatedly expressed concern about rising cable rates. Yet, the Commission's failure to rein in certain broadcasters is enabling the very behavior causing the disproportionate increase in consumers' monthly cable bills. No television viewer in America should be subjected to any form of discriminatory pricing practices, directly or indirectly, by a broadcaster.

Lack of corrective action by the FCC will lead directly to higher basic cable rates, and threaten further broadband deployment in rural areas. Pennsylvania's independent cable operators have taken the lead in delivering broadband to consumers in the state's smaller markets that would otherwise be unserved or underserved. It is these very consumers that broadcasters are targeting for inflated prices. This raises costs, hurts competition and threatens the ability of rural cable systems to deploy broadband and advanced services.

Retransmission consent has morphed from its original congressional aim to protect "localism" and the carriage of local signals. A change in the broadcast carriage rules by Congress is the only solution, and the Commonwealth's broadband cable industry is doing everything possible to help bring that about. Pennsylvania's Congressional delegation needs to hear from local consumers that the broadcasters cannot be allowed to extort outrageous cable carriage payments that negatively impact rates, and the further deployment of broadband and advanced services.