Competition, Not Consent


On July 2, 1928, the first regular television broadcast service was transmitted from a small suburb on the outskirts of Washington, D.C.

In less than 80 years since then, television has gone through such a revolution that today's Americans can view their favorite show or personality through a wide variety of media, including satellite, cable, broadcast and Internet providers.

As we move steadily into the 21st century, many have begun to question if the current television regulations allow our media companies sufficient freedom to meet the demands of their viewers. Under the current regime, whenever an individual or family chooses to sign up for a cable or satellite service, they are presented with a relatively limited number of bundled packages. These packages consist of a predetermined set of channels, ranging from family friendly cartoons to controversial gay and lesbian programs. It is a take-it-or-leave-it deal, with the viewer forced to accept stations they would never watch nor support.

In an ideal, free-market based economy, consumer demand would dictate the television programming supplied. Unfortunately, such a scenario is unlikely to unfold in today's market, due to a federal regulation known as retransmission consent.

In 1992, while examining the growing cable industry, Congress mandated cable and satellite companies carry local broadcast stations. In return for providing their signal to the companies, the broadcasters could negotiate for some form of compensation via cash or carriage. Under such a mandate, it should be of no surprise that receiving broadcaster's consent to retransmit often proves an expensive proposition.

Retransmission consent rules initially proved beneficial in increasing access to programs such as the news and weather. As the media market expanded, though, they became more hindrance than help. Broadcast monopolies, whose very existence relies on taxpayer-owned broadcast airwaves, backed cable and satellite providers into either paying overly steep prices for their local stations or taking extra programming produced by the parent company which either owned or affiliated the local channel. By the end of negotiations, dozens and dozens of extra channels were forced upon the cable and satellite companies. End result: consumers are left with a package full of channels they would never have requested.

It should come as no surprise, therefore, that the top six programming conglomerates, of which four are broadcasters, own or have interest in 153 cable channels, including nearly 75% of the top 50 channels, leading to a combined revenue of $149.6 billion.

Federal regulation must no longer prohibit the free market by enabling large network broadcasters to force limited choice on consumers. Retransmission consent rules must be reformed such that broadcasters receive just compensation for their programming while allowing cable, satellite and soon-to-launch broadband video providers the flexibility needed to offer business models which best suit both their needs and their customers' demands.

It is time our telecommunication laws be based on free-market principles where demand dictates supply. Currently, demand is harnessed by retransmission consent rules, thus preventing new and inventive programming services.