Q. I’m very confused about the DIRECTV fight with my local channel and other channels. Does DIRECTV have to pay the channel to carry it? Or does the channel have to pay DIRECTV to be in their lineup so more people can see it? Also, it seems weird to me because you can put up an antenna and watch the local channels for free. Why on earth would someone have to pay, either way? — Herb, Fairfax, Virginia.
Herb, that’s a great question which has perplexed many viewers over the years. Cable and satellite operators often engage in carriage battles with local channels which sometimes lead to blackouts when they can’t reach an agreement. Tonight, DIRECTV could lose roughly 60 local stations owned by Tegna while Dish could lose 164 Nexstar-owned locals tomorrow night in a separate fee fight.
But who pays whom here?
You could see an argument for either side to be the payer. The local channels benefit from the added viewership they receive from being in a cable or satellite TV provider’s lineup, and the cable and satellite guys actually charge their subscribers more money by including the local channels in their packages. (And in some cases, the pay TV provider implement monthly ‘Broadcast TV’ fees specifically for local channels.)
But the correct answer is that a pay TV provider has to pay up because it can not carry the local stations without their permission.
It’s the law.
In 1992, Congress passed the Cable Television Consumer Protection and Competition Act. Among its provisions is a requirement that a local TV station must offer its signal to a multichannel video distributor (cable and satellite), but only after both sides agree to acceptable terms, which is usually the exchange of money. If they can not reach an agreement, the cable or satellite operator must stop carrying the station in their lineups. (Other channels, such as ESPN and CNN, are similarly protected by copyright law; the pay TV ops can’t carry them, either, without paying.)
Over the years, it’s become the industry standard that the cable and satellite operators do the paying because they usually lose subscribers if they don’t carry the local channels. The broadcasters have them over the barrel. To offset those costs, the pay TV services usually increase their programming fees every year, and in some cases, institute those aforementioned Broadcast TV fees.
If you don’t like the law, President Bush (the first one) actually vetoed it, saying it would likely increase cable TV fees for consumers.
“The cable industry — and Mr. Bush — have argued that costs to consumers could go up because of a provision mandating service standards and a requirement that cable companies negotiate with broadcasting stations before carrying their signals,” the Baltimore Sun wrote after the veto.
Bush was right, but the Senate voted to override the veto by a vote of 74-25. The National Association of Broadcasters, one of Washington’s most powerful lobbying groups, was instrumental in persuading both Democratic and Republican senators to reject the veto. In fact, not a single Republican senator supported the president.
Herb, hope that helps. Happy viewing, and stay safe!
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— Phillip Swann