Lawmakers in New York state have introduced a proposed measure that would require broadcasters and cable network owners to negotiate carriage with cable and satellite TV providers on a per-channel basis, rather than selling bundles of channels.
The proposal is outlined in a new bill called the “Television Subscriber Choice Act,” which aims to limit programming-related disruptions on cable and satellite platforms by ending the long-standing practice of requiring pay TV providers to subsidize the cost of highly-sought channels by carrying less-favorable ones.
Proponents of the measure say the current practice drives up the cost of cable and satellite packages by forcing customers to pay for channels they don’t want, simply to access entertainment, news and sports networks that they desire. The situation gives immense leverage to broadcasters and programmers at the expense of cable and satellite customers, who face programming blackouts that can leave them without access to local news and sports when contractual disputes occur.
New York has seen its share of disputes: One recent case involved Altice U.S.-owned platform Optimum TV, which dropped MSG Networks — the local broadcaster for the New York Knicks, New York Rangers and other teams — on New Year’s Day. About a week later, Optimum also pulled channels owned by Nexstar Media Group, the largest owner of local TV stations in the country.
In both situations, Altice said both broadcasters wanted more money for continued carriage of their channels. In the matter involving MSG Networks, Altice also wanted more-favorable distribution terms that would have seen the network offered to customers beyond its then-current programming tier. Each dispute has since been resolved.
In other disputes, distributors have lost access to several channels at once. Two years ago, customers of Charter’s Spectrum TV lost the ability to watch WABC (Channel 7) in the New York area, and all subscribers also lost the Disney Channel, ESPN, FX and other Disney-owned networks, during a similar carriage dispute over fees. Charter eventually inked a new distribution agreement with Disney, one that provides it more-flexibility in terms of which channels appear in certain packages, and gives some Spectrum TV subscribers included access to ad-supported streaming services.
But the Charter deal doesn’t go far enough, because it still effectively requires the service to carry certain channels. The Television Subscriber Choice Act would change this practice by requiring broadcasters and cable networks to negotiate distribution deals across each individual channel. The end goal is to allow cable companies to pay for the channels their customers desire, without taking on ancillary junk channels that no one watches.
“As the number of Big Broadcaster TV blackouts continues to rise – driven by broadcaster demands imposing ever-higher fees on customers – more and more consumers are left in the dark, losing access to key news programming and entertainment content,” Hunter Wilson, a spokesperson with the American Television Alliance, said in a statement to The Desk on Monday. “We applaud Senator Comrie, Assemblywoman Solages and the New York Legislature for standing up for consumers. This legislation is an important step to reign in broadcasters from forcing consumers into expensive programming bundles with unnecessary costs. Consumers deserve more flexibility and control over the TV content they want to watch and pay for.”
If passed into law, it will almost certainly invite a legal challenge over whether New York state lawmakers have the ability to demand anything of broadcasters and how they enter into pay TV agreements. Currently, the Federal Communications Commission (FCC) regulates carriage agreements between broadcasters and pay TV platforms — and, typically, the only requirement is that both sides negotiate toward any such agreement in “good faith.”
Similar attempts to legislate pay TV programming agreements have failed in the past. In 2019, a new law passed in Maine required cable companies to provide subscribers with the option to purchase individual broadcast and cable networks on an a-la-carte basis. The goal was to lower the price of pay TV for consumers in Maine, but a state judge later determined that lawmakers couldn’t prove the measure would actually achieve this. The judge also took issue with the fact that cable companies were singled out because they are somewhat regulated through franchise fees, while satellite and streaming cable TV alternatives were exempt by omission. The law was overturned when a federal judge upheld the lower court’s ruling in 2021.
