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Get the facts on Local Broadcaster Retransmission Fees

Dec 28, 2017, 15:40 PM by Natalie Johnson
Television_Family Watching HD TV

What are the retransmission consent negotiations?

A decades-old federal law empowers broadcasters, including corporations that own TV stations such as ABC, CBS, FOX and NBC, to charge fees to local TV providers for the right to carry or “retransmit” their signals even though over the air programming is free to these corporations.   

If over the air programming is free, why does the local TV provider charge a fee?

While broadcasters offer their signals for free over the air, TV providers can’t offer these signals to their customers without their permission. We are required to pay fees to the broadcasters to get that permission. Most customers don’t realize they are paying fees for what most consider “free TV” such as national network shows like The Big Bang Theory and NFL games.

Why are broadcast TV fees going up?

Local TV providers strive to keep prices as low as possible. But we don’t have any control over what we are forced to pay to carry local TV stations. Unfortunately, large corporate broadcasters are charging increasingly higher fees every few years to make up for lost advertising revenue due to fewer consumers watching their programming.

How much of these “fees” are retained by the local TV provider?  

None, we pay too!  In fact, we try to absorb as much of the costs as possible, but unfortunately, a percentage has to be passed along to the customer because of the significant rise in the cost of these fees and other factors over the years.  Broadcaster fees have grown thirty times over the last decade. 

Could customers just switch to other providers, even satellite TV, to avoid blackouts and fee increases?

All TV providers, regardless of their size, must negotiate retransmission consent fees with corporate broadcasters.   This includes satellite TV.  Industry research says that 80% of TV markets in the United States have experienced at least one local broadcast blackout. DISH Network and DirecTV subscribers have also experienced blackouts due to fee disputes. Therefore, switching providers will not protect you from the threat of a blackout or price increases.

What is the real cost of broadcaster retransmission fees? – Get the Facts

According to SNL Kagan, broadcast retransmission fees will cost U.S. consumers and satellite and cable operators $11.6 billion by 2022, up from $7.7 billion in 2016. That’s a 51% increase.

Broadcast TV viewership for the four major networks has dropped by 52 percent since 2006 per Nielsen.

Corporate broadcasters like ABC, CBS, FOX and NBC continue to demand higher fees from TV providers and customers even though their audiences are shrinking.    This is to make up for lost advertising revenue as subscribers continue to drop.    

Broadcast TV fees are a growing source of income for corporate broadcasters and negotiations can become more and more challenging as they continue to profit.  These corporations are not members of our community, so they are not negatively impacted by the outcomes of these negotiations as we all are.

Madison teams up with the American Cable Association to secure the lowest possible rates and ensure uninterrupted coverage. For more information about how and why local companies like Madison Communications are subject to these lopsided negotiations every few years, go to KeepTheConnections.com or TVOnMySide.com.

As a voter, you can help change this by contacting your Congressman. Madison Communications will send a letter to your Congressman on your behalf to inform them that you would like to see broadcast carriage rules reformed. Click here to submit your information.