CBS and Time Warner Cable have settled their high-profile retransmission-consent battle, and now both sides will go back to their respective corners. Consumers, policymakers, advertisers and investors will also no doubt breathe sighs of relief. But maybe we’d all benefit from a bigger fight — not between just these two media giants, but on a broader level about what it means to be a broadcaster in the 21st century.
Of course, the CBS-TWC confrontation doesn’t take place in a vacuum. Broadcasters are not just battling at the negotiating table with cable operators, but in the courts with Aereo and Dish Network, and in the marketplace with Netflix and others. If you listen to either side of the typical broadcasterdistributor scrum, you would think the questions at stake are pretty straightforward. To broadcasters, it sounds like just a referendum on a legitimate intellectual property holder’s right to control its distribution and be fairly compensated. To distributors, it’s all (seemingly) about the unfairness of the government-created right of retransmission consent and keeping down the ultimate price to consumers. But at the heart of battles like CBS and TWC is a question we should actually be answering — why is this broadcaster diff erent from all other programmers?
Legislation introduced by Sen. John McCain (R-Ariz.), the “TV Consumer Freedom Act of 2013,” does go after significant regulatory benefits that have undergirded the broadcasting, multichannel video and even sports businesses over the last 50-odd years and is worth debating. Broadcasters could lose benefits such as network nonduplication and syndicated exclusivity, which have helped shield them from competition coming in from outside of their primary local markets; their ability to invoke retransmission consent; and even their very license to broadcast through the public spectrum. Multichannel videoprogramming distributors could lose their privileges under the compulsory copyright license with respect to broadcast stations. The legislation even lobs in a grenade against the growing (and some would say disproportionate) impact of sports by denying blackout rights to teams with stadiums benefi ting from public financing.
McCain’s bill provides an interesting debate platform, but its underlying rationale is off the mark. The real issue with these government-conferred privileges is not their imagined role in facilitating the dominance of the cable bundle. That packaging is mostly the product of long-standing private contractual relationships that, at least historically, have worked extraordinarily well for programmers, distributors and (according to the most in-depth government studies) even for consumers. The more fundamental question is whether the balance today remains appropriately struck between the private benefits long ago conferred upon industry participants and the broader “public interest” that is supposed to be the bedrock of the entire communications regulatory regime.
We shouldn’t merely ask whether, and under which mechanics, we should confer regulatory benefits such as retransmission consent, a compulsory license network non-dupe and the like. We need to go to the other side of the mirror as well — what is our definition of serving in the public interest that should frame the broadcasting regulatory environment in the first place? Is the benefit of the bargain still there for the public in bestowing free spectrum upon profitable private enterprises from whom we have been asking less and less in return since at least the 1980s? Is it enough to impose the relatively few specific obligations such as the Children’s Television Act and somewhat tighter content regulation?
During the pre-dawn era of digital broadcasting, the Gore Commission sought to put greater definition around what new obligations should be asked of broadcasters in return for continuing the broadcasting regulatory regime and actually broadening the benefits of free digital spectrum. Wouldn’t it be worthwhile to think anew about these questions in light of so many fundamental changes in the way the public consumes communications?
So if we think the regulatory tires need rebalancing, maybe instead of only focusing on eliminating historic regulatory benefi ts we should actually ramp up the content of what it means to serve the public interest — whether through broadcasters providing more access to the public airwaves, facilitating broader emergency responses, enhancing the educational experience for schools and libraries, and even contributing to the funding of public television. The issue is not whether we are pro- or anti-broadcaster, but our very defi nition of the “public interest” that broadcasters can and should serve that justifies granting the use of valuable spectrum for one-way broadcast television and whatever regulatory benefits and obligations that fairly should follow.
I haven’t seen anything indicating policymakers are ready to take on these fundamental questions, and there are a lot of sacred cows that would have to be put at risk in that examination. But once you really begin to pull on the threads that emerge from the public battles between broadcasters and distributors, we should expect — and maybe hope — for more than a bit of unraveling.
Howard Homonoff is principal/managing director of Homonoff Media Group, specializing in strategic counseling in business development for traditional and digital media companies, and is a former senior executive in both cable and broadcasting. Visit his website at homonoffmedia.com.