CBS Only Offers Choice When It Costs More for Consumers

Just two months ago, CBS tried to prevent Americans from learning about “local choice” by rejecting ATVA’s radio ads. “local choice” is a proposed law that would remove the regulations requiring pay-TV customers to subscribe to all broadcast networks as a condition of receiving pay-TV service.  Now, CBS is ready to offer online—but not pay-TV customers—a similar choice for their programming.

On October 16, CBS announced plans for its own live streaming service called “CBS All Access” The service gives consumers the choice to subscribe to CBS online without having to subscribe to other broadcast networks. This offer amounts to the same choice  Senator Rockefeller and  Senator Thune proposed for pay-TV customers through “local choice,” which CBS and its broadcast partners fought to prevent.

Local choice allows pay-TV companies to simply collect the money for broadcast networks in full from consumers and pass it through to the broadcasters without any mark-ups. And although CBS was vehemently opposed to this system for pay-TV customers, it is the same system CBS All Access would utilize by charging Internet customers directly, instead of going through Hulu+, as many networks currently do.

So why the sudden change of tune? Don’t let CBS fool you—CBS All Access is less about giving consumers choice, and more about finding another way to charge for something they falsely claim is free.

For more than two decades, with the backing of government regulation, CBS and the broadcasters have been charging Americans retransmission consent fees for content that is free over-the-air. In the last eight years, broadcasters have raised retrans rates for these “free” stations at 119 times the rate of inflation. By 2020, broadcasters will take $9.3 billion from consumers in retransmission consent fees.

As those fees have risen, so has discontent with the retransmission consent system—for viewers, consumer groups, civil rights groups and congressional leaders. Last month that discontent reached a tipping point for Congress, resulting in the introduction of the Satellite Television Access and Viewer Rights Act (STAVRA). The reforms proposed in STAVRA are the first step in beginning to curb skyrocketing retrains fees and programming blackouts by prohibiting joint retransmission consent negotiations, asking the FCC to reexamine its good faith negotiation rules and instructing the FCC to report retrans data as part of cable pricing reports.

However, as Les Moonves has made clear time and time again, broadcasters will continue to look for ways to raise retransmission consent fees as long as they have the security of government regulations that will force consumers to pay for it

To continue to bring our video rules into the 21st Century, Congress and the FCC need to ensure that ALL customers, including pay-TV customers, are not forced by regulation to subscribe to all broadcast networks as condition of receiving a service. If networks like CBS believe that consumers value their program enough to purchase online subscriptions, then they should allow pay-TV consumers to make the same vote of confidence with their purchases.

Even if STAVRA becomes law, broadcasters like CBS will continue to find ways to unfairly line their pockets. But let’s at least unshackle viewers from outdated rules and allow them to make their own choices on whether broadcast content is worth the heavy price.