FCC Backs Away From Retransmission Market Failure—What a Shame For Consumers

FCC Backs Away From Retransmission Market Failure—What a Shame For Consumers

How very, very discouraging to see FCC Chairman Wheeler’s blog post today as he made the most disappointing decision to back away from addressing one of the most serious, regulatory-driven market failures in the communications space. The evidence is beyond obvious that antiquated rules governing transmission of broadcast networks serve only to line the coffers of broadcasters at the expense of consumers and to the peril of distribution networks that carry this content to consumers. The decision to retreat from any action in this space is particularly galling given that, in many rural areas, the distribution networks offer the only means for consumers to receive broadcast content that can no longer be accessed over-the-air—and yet these distribution networks must ironically pay broadcasters ever-escalating rates for the “privilege” of carrying that signal due to outdated rules.

The Chairman noted in his blog that “it is clear that more rules in this area are not what we need at this point.” He went on to note that “we need for both sides in transmission consent negotiations to take seriously their responsibility to consumers.” Really?? It is certainly clear what is currently happening to rural consumers under this regime, because as soon as we shared this news with our Government Affairs Committee today the outrage and frustration on behalf of their consumers was palpable. There frankly are no negotiations—just dictations —and the rural consumers lose every time to the broadcasters whims and greed. And no rules are needed here, but they are needed on items like set-top boxes, where the FCC has created a solution in search of a problem? Count me baffled.

Truly, if the goal is to ensure that today’s already-broken video distribution marketplace continues in a death spiral, today’s indecision paired with the FCC’s ongoing consideration of how to foist costs on distribution networks via ill-advised set-top box proposals certainly represents “progress.”

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