I was in law school so was barely aware that it was 1992, but the rest of the country was pouring in to theatres to watch “Wayne’s World” or “Basic Instinct” (not being patient enough to wait until it came out on VHS tape), tuning the non-satellite, non-HD radio to “I’m Too Sexy” (no iPods or downloading of music yet available) , were flocking to Border’s to snatch up The Pelican Brief or Waiting to Exhale (No Amazon.com so no Kindle much less digital books) , and gathered expectantly every week for new episodes of ”Cheers” (no DVR or content available online so you had to watch when it aired). Cable was the only game in town for pay television, no satellite, telco, or overbuilder options (and "over the top" video was a fantasy)
1992 was also the year that gave us the Cable Act, setting out rules governing how those distributing video signals carry them from the local broadcasters, which has led to policy fights between broadcasters and cable companies, as well as contract fights that leave the public often threatened with some anticipated program not showing in their market.
The reasons that this public train wreck keeps happening are many, but not least of which is the meddling by Congress to favor "local" content over other shows, put a regulatory "thumb" on the scales in program negotiations, to drive down the value of some copyright protected material and interfere in the right to contract. As things stand, broadcast stations receive a continuing and increasing stream of payments for their signals – guaranteed income.
Both sides say the system is broken but have incentives to keep some things the same. As things stand, broadcasters receive a continuing and increasing stream of payments for their content – guaranteed income. But, of course, broadcasters with more valuable content are stuck in a less than free market where they cannot realize the full potential of the value of their content.
But broadcasters are entitled to fair value for their content. Providing prime time shows, sports programming, local news, or other local content, requires considerable time, effort and resources, and broadcasters bear almost all of the market risk of their product.
The solution is a free market, leaving the negotiation of retransmission consent agreements to the private marketplace with government on the sidelines providing law enforcement against wrongdoing. In other words, government must get out of the business of interceding into already negotiated cntracts. Legislation introduced by Congressman Scalise and Senator DeMint, called “The Next Generation Television Marketplace Act,” attempts to solve some of the problem and tries to rely to a greater degree on market forces and deregulate retransmission consent, must carry, and compulsory copyright license.
The legislation is not without its critics, of course, particularly among broadcasters who see that the current system, while not perfect, does function. Whether or not their concerns will be addressed remains to be seen as the bill was just introduced in December.
But given all the marketplace and technological changes that have taken place since 1992, it’s worth the effort to come up with a legislative solution that stops relying on a 20 year-old regulatory structure.
February 23, 2012