The former FCC chairman and current CEO of NCTA, Michael Powell, says the regulation requiring cable subscribers to buy a basic broadcast tier needs to go.
Powell Urges Elimination Of ‘Must Buy’
National Cable & Telecommunications Association President-CEO Michael Powell told federal lawmakers today that an FCC regulation requiring all cable subscribers to buy the broadcast basic tier should be axed.
“It should be an extraordinary circumstance in which the government tells the consumer you have to buy a television package as a prerequisite of buying more of what you want, which is essentially what the rule does,” said Powell, a former FCC chairman, during a hearing before the House Communications and Technology Subcommittee.
Powell also told lawmakers that the so-called must-buy regulation is unfair because it applies only to cable, not cable’s competitors. “The other grounds on which I think it [the must-buy regulation] is fatally flawed is only cable subscribers have that obligation,” he said. “Dish and DirecTV satellite subscribers do not have that obligation, and they’re the second and third largest MVPDs [multichannel video programming distributors] in the United States.”
Powell’s comments came in response to a question from Rep. Anna Eshoo (D-Calif.) who introduced retransmission consent reform legislation late last year that would, among other things, clear the way for consumers to buy cable TV channels without first having to subscribe to cable’s broadcast tier.
During the hearing, Eshoo said that the basic tier requirement is adding to subscriber costs as cable operators pass along the escalating retransmission consent fees from broadcasters.
“Shouldn’t consumers have the ability to lower their bills by electing to receive broadcast channels over the air?” Eshoo asked Powell.
Said Dennis Wharton, a spokesman for the National Association of Broadcasters, in response: “NAB supports this law to preserve localism and diversity on cable and to prevent discrimination against broadcast TV by our cable friends.”
Added one Washington communications industry source: “It’s extraordinary that ranking member Eshoo and Michael Powell would raise the issue of alleged unfairness of cable program packaging without mentioning the elephant in the room: a la carte. A truly consumer-friendly cable industry would allow customers to pick and choose every channel they want, and not force them to pay for hundreds of channels that few people watch.”
Powell’s support for the regulatory reform comes as part of a new NCTA initiative to put more of the association’s weight behind the retransmission consent reform effort, a cable TV insider said.
NCTA has previously largely been sitting out the reform campaign because, along with representing cable operators, it also represents major programmers with significant broadcast interests — including The Walt Disney Co., Fox and CBS. In addition, Comcast, NCTA’s largest member, owns NBCUniversal and has a conflict over the retransmission consent regulations.
In December, Powell announced the NCTA’s intent to beef up its lobbying profile in support of retrans reform. “We welcome an examination of a retransmission consent regime that is increasingly fractured and in need of some repair,” he said in a statement at the time.
Despite the association’s internal conflicts with its members, NCTA has previously urged the FCC to crack down on the ability of broadcasters to use sharing agreements to negotiate retransmission consent agreements for multiple stations in a market.
In her opening remarks at the hearing, the first in a series in a multi-year congressional review of the Communications Act, Eshoo also made clear that she believes that Congress should reform the retransmission consent regulations this year. “The current TV blackouts, coupled with the rising cost of broadcast television programming … has left consumers frustrated and looking to Congress and the FCC for answers,” Eshoo said.
Also testifying at the hearing were former FCC chairmen Richard Wiley, Reed Hundt and Michael Copps.