Where is this TV "free market"?

Hammer on televisionThe president of the National Association of Broadcasters sent a letter to FCC asking it to stay out of coming retransmission fee disputes. In other words, the NAB doesn’t want the government to interfere when one of its stations holds cable or satellite viewers hostage for a better contract.

Now it’s normal for the NAB to want as much leverage as it can manage so its members can get as much money as they can get. That’s the capitalist way. What galls me is that the letter said the member stations want their negotiations to “remain free and market-based.”

When it comes to any given cable system, there is no “market” for broadcast programming. If a local system wants to show NBC, it can’t shop around to see which broadcaster will sell it at the best price. Its choices are to pay whatever the local NBC affiliate demands or to cause mutually assured damage by dropping NBC. The trouble with the second choice is that it hurts a lot of local NBC viewers as well as the station and the cable system.

For the public good, the government ought to get the cable and satellite systems to sit down with the broadcasters and hash out one equitable retransmission fee formula to be applied to the entire country. Such a formula would probably include an over-the-air channel’s percentage of viewers and the system’s number of subscribers. When a channel’s ratings go up or down, the cable or satellite system would adjust its payments higher or lower. If a channel’s ratings stayed below a certain threshold, it would receive no cash but would stay in the channel lineup, as with must-carry stations now.

The parties could revisit the formula every few years, and that would be it. We’d never see another local station go off a cable system over a retransmission dispute. The broadcasters would receive a truly fair, negotiated fee. But it’ll never happen unless and until the government folks (you know, we the people) insist.