Congress shouldn't carry water for pay-TV

[Commentary] 2013 ended with hundreds of deals between television broadcasters and pay-TV providers successfully negotiated. No blackouts, no drama. A respected industry watcher recently remarked that, “TV blackouts are in a quiet period.” So, why is Congress proposing legislation to put the federal government in the middle of market-driven disputes?

The reason is stiffening competition in the video marketplace. Verizon, AT&T, and Google are now offering cable service, and Netflix, Amazon, and Hulu are offering award-winning original series online. The news that Amazon is considering adding live TV to its online video offering indicates this space is going to become even more competitive over the next few years. Pay-TV providers are feeling the squeeze from the increased competition and are pushing Congress to regulate their rivals. That’s why a group of pay-TV providers is lobbying for government-mandated prices for television programming distribution rights. Reps Steve Scalise (R-LA) and Anna Eshoo (D-CA) each introduced bills on the same day in January 2014 to give pay-TV providers special treatment when negotiating rights to resell broadcast programming to cable customers (rights known as “retransmission consent”). But it is no coincidence that, though each bill is styled as an effort to reform the video marketplace, they would regulate only local TV stations. The real purpose of these bills is to help Pay-TV providers maximize their profits by shifting a portion of their programming costs to broadcasters. Pay-TV providers want to have it both ways. They want the ability to blackout channels they don’t think they need while asking Congress to prevent broadcasters from withholding their programming when video providers refuse to pay. Enhancing the power of pay-TV providers over programming in this way might improve their bottom line, but it wouldn’t benefit consumers. Congress should just say no.

[Fred Campbell is executive director of the Center for Boundless Innovation in Technology and former chief of the FCC’s Wireless Bureau]