Sen. Jay Rockefeller (D-W. Va.) and Sen. John Thune (R-S.D.) are proposing that subscribers to cable and satellite services be allowed to choose which broadcast channels they want to pay for as part of their multichannel package.
Their proposal was met with immediate opposition on Friday from the broadcast lobby -- and praise from groups representing pay-TV providers and smaller cable systems.
The rationale behind the proposal has been to limit the blackouts that occasionally take place when multichannel operators negotiate with broadcasters for retransmission rights, according to The Hill. A showdown between CBS and Time Warner Cable last year saw a month-long blackout on the latter's systems.
Rockefeller, the chairman of the Senate Commerce Committee, and Thune, its ranking member, plan to attach their proposal to the Satellite Television Extension and Localism Act, which is now making its way through Congress. That legislation would renew provisions that allow satellite companies to carry broadcast signals to rural customers.
The American Television Alliance, an organization of cable, satellite and telephone companies, said that the proposal would "provide consumers with great choice and transparency and would end retrans blackouts once and for all."
Matthew Polka, president and CEO of the American Cable Assn., said that the proposal would "put consumers first" and "provide consumers with more choice in the selection of TV station programming than they have seen in decades."
Nevertheless, the proposal is likely to face fierce opposition for broadcasters, who have seen retransmission fees as an increasingly lucrative revenue stream, now totaling an estimated $4 billion. Allowing customers to choose whether they want to pay a station's set fee in order to get the channel very likely would cut into that, as it gives them an "ala carte" option. Many large cable providers and media companies have generally been opposed to such an "ala carte" option when it comes to non-broadcast channels, as it is likely that many of those channels would not be able to survive under such a scenario.
Of course, any consumer with an antenna can get all the broadcast channels for free if they want to go through the trouble of setting one up.
Dennis Wharton, spokesman for the National Assn. of Broadcasters, said that the proposal "represents a significant rewrite of the Communications Act. Given the shortness of time between now and the end of the Congressional session, we question whether there is sufficient time for key committees in Congress to give this proposal the thorough review that is warranted."
(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC
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