Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va) and Ranking Member Sen. John Thune (R-S.D.) released a bipartisan proposal on Sunday called "local choice."

Following the proposal, the American Television Alliance made a statement applauding the senators’ efforts to "fix the broken and outdated retransmission consent regime," through bipartisan compromise.

If the senators see the proposal into formal legislation when they return from recess, Local Choice could make the first steps in setting precedents for the future of television and streaming services. Local Choice could have broad implications for existing streaming services like Netflix or Hulu, but that is a whole other issue.

Local Choice would end the retransmission system that cable and satellite companies use to pay broadcast networks for content. Instead of compromising with ABC, NBC, FOX or CBS over prices for bundling their content with other channels, broadcasters would sell their content to individual viewers directly. Cable customers would be able to partly unbundle their packages.

As a result from this proposal if ever made into law, customer choices would have a more direct influence over the television market. The price of retransmission would likely drop and broadcasters would have to hire a larger sales team to be able to deal with those customers directly.

As one might imagine, broadcasters are not happy about this because it would result in a spike in competition for them, but at least they would get paid.


Advertisement

This is a significant step in the right direction for media, following technological advancement and consumer trends. Consumers are now streaming content online and receiving broadcast content over digital signals to their television or computer. Local Choice would meet that trend.

The Federal Communications Commission and our copyright laws cater to the needs of 20th century technology in which broadcasters were limited in number due to the restricted spectrum of analog airwaves.

It is now the 21st century, so there is room for more than four to five broadcast networks. Laws that once protected a free market are now outdated and restrain competition. That doesn’t leave much of a choice to consumers.

If customers could choose what broadcasters they wanted to obtain content from, control could be put back in their hands. It might set a precedent and customers could eventually see the ability to unbundle the rest of their cable services, not having to pay for what they don’t want.

Aereo

Recall the Supreme Court decision that was made in late June, ABC et al, v. Aereo. Aereo is a ‘new media’ model that retransmits digital broadcast signals to its customers to schedule, record and play programming at their convenience from their home computer or television. They built an infrastructure of mini antennas, each rented to an individual customer, and used at their convenience.

Although unlike cable, Aereo does not constantly transmit the broadcast signals to its customers, the court ruled that the company was violating copyright law, and should owe retransmission fees to the broadcasters.

Aereo and the court’s decent noted the problems associated with treating the company as subject to the same copyright rules as cable companies, which we noted in an earlier editorial.

Local choice could give Aereo a second chance, since its original model was struck down by the Supreme Court. Aereo’s business model was struck down because the broadcasters didn’t want an Internet startup sneaking out of paying them the retransmission fees they receive from cable companies and they sued.

Under Local Choice, Aereo would have a chance to avoid those retransmission fees, which would be transferred over to its customers directly. To do so, Aereo would have to argue contrary to what it did in the Supreme Court case: That it is a cable company, or "multi-channel video provider," as far as the FCC is concerned, and would be able to give its customers the choice of picking and choosing which broadcasters to grab content from.

Local Choice would be a possible lifeline for Aereo, being able to put its mini antenna infrastructure back into use, although probably at a higher price for its customers.

Local choice is a step in the right direction for keeping up with consumer demand and technology. It gives ‘new media’ startups a starting point to determine their own sources of content and to determine how it will attach itself to existing infrastructure.

Broadcast companies and laws that they adhere to are still based in an outdated analog system that is no longer in use. Media laws need to change in order to augment creative startups that increase competition and move with the advancement of technology.

Kudos to Sens. Rockefeller and Thune for acknowledging the importance in moving forward, so consumers aren’t left in the past, letting their media have more influence over them than they have over it.

~Tom Momberg