Is broadcasting’s past holding back TV’s future?
When it comes to disputes between companies, particularly when they’re just about money, I usually don’t care about the he-said/she-said. What matters is the effect on consumers, and when financial disputes between companies threaten to harm consumers, I just want them to work it out.
But the Time Warner Cable/CBS dispute has gotten ugly, and from what I can see, CBS is being unreasonable, not TWC. The details of the dispute are nothing new—the law gives broadcasters the right to make cable systems pay them for carriage—something that other antennas technologies that pick up broadcast signals off the air don’t have to do. The two companies can’t agree on a price, and as a result, CBS might drop off of TWC viewer’s TVs. (Unless they have an antenna, or a service like Aereo, of course.)
Consumers will undoubtedly get mad at both TWC and CBS if they lose access to programming they like, but when it comes down to it, CBS is inflexibly demanding more money from viewer’s wallets and TWC is looking for ways to keep costs low. (This is not to say that TWC is guaranteed to pass any savings or cost control measures on to viewers, of course. Baby steps.) CBS won’t even negotiate on channel placement, telling Bloomberg that “CBS obviously won’t make any deals that require us to change our channel position.” Why is that “obvious” exactly? In a commercial negotiation, everything should be on the table.
Except that it’s not. Broadcasters have systematic advantages over cable systems in these negotiations, which is why—despite all the criticism PK has leveled over the years at the cable industry on data caps, net neutrality, content restrictions, broadband buildout, and much else—when it comes to retransmission disputes, they have a point.
For example, a cable system is forbidden by law from offering broadcast channels à la carte. A cable system simply doesn’t have the option of just paying a broadcaster for just those subscribers that choose to get broadcast programming via a cable wire instead of over-the-air. All broadcast stations are entitled to be carried on the “basic tier,” and all cable subscribers are required to buy the basic tier in addition to whatever other programming they want. What’s more, local broadcasters have a legally-protected local monopoly on national content they might have nothing to do with creating–they get protections beyond what could be enforced by contract. Cable systems can’t try to strike a deal with anyone else. It’s hard to characterize disputes with these rules as a backdrop as merely “commercial”–they’re entirely shaped by public policy.
PK has proposed various changes to the rules that would fix these problems—stand-stills that would prevent black-outs, preventing broadcasters from leveraging high-profile events like the Superbowl and Oscars in carriage negotiations, and relaxing the prohibitions on “distant signal importation” and similar rules.
But maybe it’s time to think even more deeply about what these disputes show us about the state of the media and communications marketplace, as start asking some more questions. I don’t pretend to know the answers to these–there are a lot of considerations on both sides. But why do cable systems have to pay for broadcast stations at all, when their signals are available for free to anyone with an antenna? Is there a way for cable systems to merely “pass through” broadcast charges to customers so they know who to blame? Should broadcasters be allowed to leverage their free spectrum and government-granted monopolies to force cable systems to carry their other properties (cable channels)? Why don’t cable systems just start building antennas into their set-top boxes? Could the current structure of the broadcast industry make it harder to repurpose spectrum for wireless broadband, in efforts like the FCC’s incentive auction?
Broadcasting absolutely remains an important medium, and the ultimate purpose of broadcast rules is to promote good things, like localism and notice of emergencies. But broadcasters are increasingly forgetting about the “free, over-the-air” part of their mission and focusing more and more on getting cable subscribers to pay higher bills. There are a lot of ways to promote the public interest, and we shouldn’t be wedded to the approach of the 1950s. It might be time to start wondering how the past of broadcasting is holding back the future of television.