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TV viewers in the Pittsburgh region have been recently warned about losing the ability to watch their local television stations:
• DirecTV viewers lose WTAE after negotiations for a new deal fail
• WPXI Channel 11 announces PCNC changes
• Attention Dish customers: You could lose access to WPXI-TV
They’re the result of expiring retransmission contracts between the stations and the cable and satellite providers that pay a negotiated fee to rebroadcast them.
Neither side benefits if viewers are left in the dark, but shedding light on the ins and outs of the behind-the-scenes dealmaking behind the pacts is tough. Aside from corporate statements, no one involved will comment publicly about the deals.
“I’ve never seen a retransmission consent contract,” said Ted Hearn, vice president of communications for the America’s Communications Association, a Green Tree-based trade group that represents the interests of about 700 smaller cable companies. The group doesn’t include the behemoths Comcast, Charter, Cox and AT&T, the parent of DirecTV.
From Hearn’s perspective, broadcast stations and the conglomerates that own them are exploiting federal regulations and market dominance to get what he termed egregious sums of money paid by small cable companies that are ACA members.
Dennis Wharton, vice president of communication for the National Association of Broadcasters, a trade group that represents the interest of 7,500 radio and television stations, sees things differently.
“Broadcasting is far less consolidated than the companies we’re negotiating against,” Wharton said.
AT&T’s market capitalization (the total value of its stock) is $277.8 billion. That’s more than the combined value of every broadcast company combined, according to Wharton.
“Who’s got the leverage?” he mused.
“Rabbit ears” are a relic now. Those old-fashioned, bent-up pieces of metal — which are likely gathering dust in a grandparent’s attic or basement — are the antennas that people hooked up to their television sets to get broadcast signals, free of charge. They hearken back to a simpler time when one had to get off the couch or up from an easy chair to turn a dial from channel 2 to 4 or 11.
Now, it’s remote controlled and shown on a high-definition, 60-inch flat screen mounted above the mantel with an endless, ever-changing array of providers, channels and streaming services that allow you to watch the programs you want, when you have time to watch them.
The convenience comes with a catch, however, as each service charges subscription fees beyond the price of electricity to power up the set.
One thing hasn’t changed: People still want to watch their local television stations. In the Pittsburgh area, that means KDKA, WPXI, WTAE and WPGH, the local affiliates of CBS, NBC, ABC and Fox, respectively.
The vast majority of viewers still watch broadcast television, even if they’re doing so using a cable or satellite provider, Wharton said.
Those stations are offered as part of cable and satellite programming packages, which rebroadcast them by paying a fee to the companies that own the stations. The fee is negotiated in a contract and many of these pacts expired Dec. 31.
“Ninety-nine percent of these deals get done without any disruption whatsoever,” Wharton said.
When a deal isn’t reached and the contracts expire, customers face a threat of losing the ability to watch the stations. It’s been the case in the Pittsburgh region recently as both Hearst Communications, which owns WTAE, and Cox Communications, which owns WPXI, have had to renegotiate their contracts with providers.
It resulted in brief disruption of service for WPXI viewers who were Verizon Fios customers and WTAE viewers who were DirecTV customers. New agreements were reached in both cases, but another contract between Cox and Dish Network is in negotiations.
“There’s an incentive on both sides to get these deals done,” Wharton said. “It’s only in very rare instances there’s a disruption of service.”
The deals themselves can be complicated and don’t always revolve around money, according to Angela Campbell, a professor at Georgetown Law School who teaches communications law.
While cash is a factor, other things like advertising or promoting a broadcast programming on cable channels, broadcasting other digital channels, or other considerations can be at play, Campbell said.
The trade group leaders from both sides agreed, although the exact terms of the pact remain between the specific provider and the broadcaster and aren’t made public.
The laws governing how these deals work date back to the 1990s and haven’t kept pace with the changing ways people watch TV.
The Cable Television Consumer Protection and Competition Act of 1992 required cable companies to carry local television stations and prohibited cable providers from charging broadcast companies to carry their stations.
But stations could elect to be exempt from “must carry” status and instead negotiate a retransmission agreement with a provider where they would be paid if the provider carried them, according to Wharton.
In 1999, the first Satellite Television Extension and Localism Act was enacted and it was reauthorized in 2004, 2010 and 2014.
It was allowed to expire in 2019, but portions of the law were included in appropriations legislation that was signed into law before the end of the year, and this time they were made permanent.
The legislation sponsored by U.S. Rep. Mike Doyle, D-Forest Hills, who leads the Subcommittee on Communications and Technology of the House Energy and Commerce Committee.
In June, Doyle led a hearing on the legislation where he acknowledged the “complex marketplace” that is America’s television industry.
The law is designed to prevent blackouts to customers, according to Doyle.
The new law permanently requires good faith negotiations for retransmission agreements and requires pay TV companies to adhere to truth-in-billing fee disclosure, both of which were supported by the broadcasters’ association, which called them pro-consumer provisions in a statement.
Cox, the company that owns WPXI, and Dish, the satellite provider, remain in negotiations for a new retransmission agreement.
