How Much Would You Pay to Watch NBC?

The leaders of the Senate Commerce Committee want to unbundle broadcast TV channels.

Members of the cast of NBC's 30 Rock.
National Journal
Brendan Sasso
Aug. 11, 2014, noon

A pro­pos­al from two key sen­at­ors would let you pick and choose which broad­cast TV chan­nels you want.

So view­ers who want to save some money on their monthly cable bill could drop Fox. Or NBC. Or any loc­al over-the-air sta­tion.

Sen. Jay Rock­e­feller, the Demo­crat­ic chair­man of the Com­merce Com­mit­tee, and Sen. John Thune, the pan­el’s top Re­pub­lic­an, un­veiled the pro­pos­al Fri­day.

One broad­cast TV ad­vocacy group, TV­Free­dom, has come out swinging against the idea. Robert Kenny, a spokes­man for the group, ar­gued that hid­den charges, equip­ment rent­al fees, and ex­pens­ive cable chan­nels are the real reas­on for soar­ing TV bills.

The Sen­ate pro­pos­al would only let con­sumers un­bundle broad­cast sta­tions — not cable chan­nels like ES­PN.

“This ap­proach fails to of­fer con­sumers real pro­gram­ming choices or ser­i­ous eco­nom­ic re­lief, yet forces them to con­tin­ue over­pay­ing for rarely watched cable chan­nels such as Spike TV and TruTV,” Kenny said in a state­ment Monday, ar­guing that pop­u­lar broad­cast chan­nels amount to a “pit­tance on the price of a monthly pay-TV bill.”

But that “pit­tance” has been rising stead­ily in re­cent years. Broad­cast sta­tions are ex­pec­ted to rake in $5.1 bil­lion next year in fees from cable pro­viders, ac­cord­ing to an ana­lys­is by re­search firm SNL Kagan. When ne­go­ti­ations between broad­casters and cable pro­viders break down, it leads to black­outs that leave view­ers without ac­cess to their fa­vor­ite shows.

The gov­ern­ment gives broad­casters ac­cess to valu­able pub­lic air­waves, and the sta­tions are avail­able for free over-the-air to any­one who sets up a TV an­tenna. But most view­ers watch the sta­tions as part of pack­ages from their cable pro­vider, and the cable fees have be­come an in­creas­ingly crit­ic­al rev­en­ue source for the broad­casters.

The goal of the Sen­ate pro­pos­al, called “Loc­al Choice,” is to pre­vent chan­nel black­outs and to al­low con­sumers to drop broad­cast sta­tions they don’t want. Broad­casters would have to con­vince in­di­vidu­al con­sumers of the value of their chan­nel.

The Na­tion­al As­so­ci­ation of Broad­casters, the main lob­by­ing group for the TV net­works, is­sued a more cau­tious state­ment than TV­Free­dom, ques­tion­ing wheth­er there is enough time be­fore the end of the con­gres­sion­al ses­sion “to give this pro­pos­al the thor­ough re­view that is war­ran­ted.”

The Amer­ic­an Cable As­so­ci­ation, which rep­res­ents small cable pro­viders, said Rock­e­feller and Thune de­serve the “highest praise” for of­fer­ing a pro­pos­al that would “provide con­sumers with more choice in the se­lec­tion of TV sta­tion pro­gram­ming than they have seen in dec­ades.” The group has long ar­gued that in­creas­ing broad­cast fees have meant high­er bills for con­sumers.

But the Na­tion­al Cable and Tele­com­mu­nic­a­tions As­so­ci­ation, which rep­res­ents gi­ant cable pro­viders like Com­cast, has been si­lent on the pro­pos­al, which if ap­proved could be a slip­pery slope to an “a la carte” style sys­tem for all cable tele­vi­sion. Sen. John Mc­Cain and oth­ers have pushed le­gis­la­tion that would let con­sumers pick and choose any in­di­vidu­al chan­nels they want — not just broad­cast sta­tions.

NCTA rep­res­ents an ar­ray of me­dia in­terests, such as Com­cast’s NB­CUni­ver­sal, that are op­posed to “a la carte” pro­gram­ming.

Rock­e­feller and Thune plan to in­clude their pro­pos­al as part of le­gis­la­tion to reau­thor­ize the Satel­lite Tele­vi­sion Ex­ten­sion and Loc­al­ism Act, which is set to ex­pire at the end of the year. The law al­lows about 1.5 mil­lion satel­lite TV sub­scribers in rur­al areas to ac­cess broad­cast chan­nels, and many law­makers con­sider the reau­thor­iz­a­tion bill “must pass” le­gis­la­tion.

But their pro­pos­al looks like a long shot in the wan­ing days of the Con­gress. Sen­ate Ma­jor­ity Lead­er Harry Re­id has said he is re­luct­ant to take up any con­tro­ver­sial le­gis­la­tion.

“You can’t come up with a more con­tro­ver­sial pro­pos­al than this one,” one TV in­dustry of­fi­cial said.

The Sen­ate Ju­di­ciary Com­mit­tee has already ap­proved a “clean” up­date of the satel­lite TV law, and the House passed a reau­thor­iz­a­tion bill that only makes minor tweaks to the TV in­dustry.

Law­makers are ex­pec­ted to be­gin work next year on the first ma­jor re­write of com­mu­nic­a­tions law since 1996. The “Loc­al Choice” pro­pos­al could be an im­port­ant start­ing point in those ne­go­ti­ations.

House En­ergy and Com­merce Com­mit­tee Chair­man Fred Up­ton is­sued a state­ment say­ing it is “im­per­at­ive” that the Sen­ate act quickly to reau­thor­ize the satel­lite TV law. But he said he looks for­ward to work­ing with the Sen­ate on the broad­er Com­mu­nic­a­tions Act re­write.

“Provid­ing in­nov­at­ive solu­tions to meet the chal­lenges of an out­dated Com­mu­nic­a­tions Act should be en­cour­aged and ap­plauded,” Up­ton said.

{{ BIZOBJ (video: 5156) }}

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