October 15, 2019 at 5:00 am ET
If it feels like it’s been awhile since you watched broadcast television, you’re not alone. Roughly one-third of television viewers are now cord cutters — they’re getting all TV from streaming and apps instead of using cable or satellite.
While that might be nice for folks who prefer Netflix to CBS, this changing dynamic is causing problems for the two-thirds of viewers who still use a video provider, especially those who watch the local news or college and high school sports from their hometown. As broadcasters lose eyeballs they’re losing advertising dollars. To make up for that revenue loss, they’re pressuring video providers to pay more in retransmission fees.
These increasingly tense contract negotiations are resulting in blackouts as broadcasters treat viewers as pawns in their negotiating game. According to the American Television Alliance (ATVA), 2019 is on track to be the “worst year ever” for blackouts. During the first seven months of the year there were 213 blackouts, and the organization expects that number to climb toward the end of the year when many contracts come up for renewal.
And believe it or not, things could get much worse.
Right now, one of the only things holding broadcasters back from waging all-out war on video providers is the Satellite Television Extension and Localism Act Reauthorization (STELAR), which expires Dec. 31. STELAR requires that broadcasters and providers negotiate in good faith over retransmission deals. Not everyone plays by that rule. Sinclair Broadcasting, which owns local networks in more than 100 markets, has pulled stations and refused to negotiate in good faith, according to complaints filed with the FCC. But right now this is the best system we’ve got.
On Oct. 23, the Senate Commerce Committee will debate STELAR reauthorization before it expires at the end of this year. There’s plenty at stake. If STELAR isn’t reauthorized, there will be no system at all. Without the STELAR regulatory framework, broadcasters like Sinclair will have free reign to not negotiate at all and to hold viewers hostage to their unreasonable demands.
But reauthorizing STELAR should be just the first step. Today, the video broadcasting world is still governed by laws that were passed in 1992 — a time well before Wi-Fi, iPhones and Hulu. Congress should view STELAR as a much-needed stop gap. Ultimately, we need to update communications regulations to reflect the new reality of television — including streaming, cord cutting and a continuing need for local broadcasting.
Mike Montgomery is executive director of CALinnovates, a California-based technology advocacy organization.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.