Big Cable Would Prefer If You Paid Their Bills

Big Cable Would Prefer If You Paid Their Bills

What would happen if you decided to suddenly stop paying your cable bill? Obviously, the cable company in question would not tolerate your negligence for very long, and after some time, would certainly shut off your access to channels full of quality and not-that-high-quality programming.

Right now in Congress – specifically in the Senate – there is a heated debate between broadcast companies and cable operators like Direct TV over legislation that would strip broadcasters of their ability to negotiate in the free marketplace. Some cable operators, it turns out, would love to provide Americans with the quality content American broadcast companies churn out. They just don’t happen to want to pay for it.

The Next Generation Television Marketplace Act of 2011 is spawning a debate over whether broadcasters should be forced to give away their content, simply because cable operators do not want to pay for it. As it turns out, cable and pay television operators like Direct TV believe they shouldn’t have to. They are lobbying in Washington for key provisions in legislation that would that would allow the Federal government to intervene in what is otherwise a sound, private sector marketplace that benefits consumers each and every day. And they’re doing so under the guise of “deregulation.”

Unfortunately, it’s not real deregulation – at least not in any sense or definition that’s familiar to conservatives. Under the guise of the word “deregulation” the operators are allowing the federal government to intervene in an argument between them and broadcast companies who provide the shows Americans watch – an argument that’s arisen out of the natural workings of the market. American broadcasters are no longer content to allow millions of people to watch their content without being fairly compensated for it. DirectTV and others simply feel that this position is unfair.

Back in March when the issue first arose, Al Cardenas of ACU published his thoughts on the matter, indicating that while the market was not technically a free one, government intervention to tip the scales in the favor of one side or the other would beyond the scope of what we generally trust government to do, especially if the matter in question is about “consumer protection.”

“By stripping away the right to compensation for the use of the signal…the government would be tipping the scales heavily to the side of the pay-tv companies. It would distort the marketplace and allow an uncompensated use of broadcast signals and content and is certainly not “deregulation.”

In 1992 Congress set up a process called “retransmission consent,” by which broadcasters and the pay-tv industry negotiate for the use of the broadcast signal. Until then, the heavily subsidized pay-tv industry was simply allowed to use broadcast signals for free, profiting from its retransmission by selling the broadcasters’ content as part of their basic service. Its a sweet deal, because it means that taxpayers and not cable companies actually pay for what broadcast companies work hard on. Essentially, that means you pay your cable bill twice: once to the cable operator and once to the federal government for your cable operator.

Makes sense, right?

The response by cable and pay TV operators is that broadcasters are charging “exorbitant” fees for retransmission, and should not have any control over its signal or the content for which broadcasters are making significant financial investments at great financial risk.

Unfortunately for Americans, the usual response by both parties is a blackout – like the one which threatened middle America with missing Major League Baseball’s opening days – which ends service to thousands of cable customers nationwide. And of course cable and pay TV operators are crying to Congress over retransmission fees they describe as “exorbitant.” Until 1992, they profited without paying one, single cent to the people who made the material they were essentially selling access to.

So, why should broadcasters be forced to simply give away their signals and content? Since when has allowing the Federal government to intervene in a well functioning private sector marketplace – or the inner workings of the market – been within the definition of “deregulation?”

Next month, try this with your cable bill: take all of the content you want, and refuse to pay the cable operator one single, red cent. They won’t tolerate non-payment, but yet, here they are, asking Congress to step in and ensure that they will never have to pay their own bills.

It’s not particularly fair, unless you’re a cable operator.


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