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Networks, streamers band together to oppose FCC changes

The "Preserve Viewer Choice Coalition" says a push by broadcasters to change federal rules will drive up prices for consumers.

The "Preserve Viewer Choice Coalition" says a push by broadcasters to change federal rules will drive up prices for consumers.

A television set with streaming content.
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A group of streaming media companies and broadcast television networks are banding together to oppose a push by local broadcast station owners to change some federal rules concerning retransmission consent agreements.

On Thursday, the Preserve Viewer Choice Coalition launched, comprised of traditional and new media companies that have a stake in the streaming television industry. Those companies include Comcast’s NBC Universal (NBC, Telemundo), the Walt Disney Company (ABC), Paramount Global (CBS), Fox Corporation (Tubi), TelevisaUnivision, Warner Bros Discovery (WBD, Max), Fubo and Roku.

The group appears to be a direct response to the Coalition for Local News, a similar consortium that launched last week with the backing of Nexstar Media Group, Sinclair Broadcast Group, the E. W. Scripps Company, TEGNA and other major independent broadcasters, who argue that the Federal Communications Commission (FCC) should re-classify streaming services a multi-video programming distributors.

Such reclassification would require online platforms that sell access to streaming versions of broadcast and cable channels to negotiate directly with independent affiliate station owners. Traditionally, those negotiations have been handled at the network level on behalf of station owners.

Broadcast station owners argue that they are losing out on significant revenue because they are not able to negotiate directly with platforms like Fubo, YouTube TV and others. By comparison, traditional cable and satellite companies are required by the FCC to negotiate carriage deals in good faith with the owners of affiliate stations.

Three of the four major networks owners — Comcast, Disney and Paramount — operate their own premium streaming services that offer tiers with access to streaming versions of network-owned and affiliated local stations. Under the changes proposed by the Coalition for Local News, those services would have to negotiate carriage of affiliate station feeds, just as cable and satellite operators do.

The changes would also impact streaming cable TV alternatives — Fubo, YouTube TV, Sling TV, Vidgo and DirecTV — which have historically made arrangements with Paramount, Disney, Comcast and Fox for carriage of network affiliates.

The Coalition for Local News argues that the lost revenue impairs their ability to invest money in local news broadcasts. But their counterparts at the newly-formed Preserve Viewer Choice Coalition argue just the opposite, saying the proposed changes could harm local news providers and will drive up costs for streaming customers.

Bryce Harlow, a spokesperson for the Preserve Viewer Choice Coalition, said the push by local broadcasters was less about getting their affiliate stations on streaming services — “that’s already happening,” he quipped — but more about “trying to use government mandates to interfere with business negotiations.”

“Consumers deserve the freedom to access diverse video content and enjoy a wealth of choices, which is why we oppose proposed regulation that would threaten that choice, stem innovation, and increase the cost to consumers,” Harlow affirmed.

Harlow said the types of negotiations that local broadcast station owners seek are already starting to happen, too. And there is some indication that is true: In April, Sinclair announced it was onboarding several new digital channels on YouTube TV as part of a deal that also included carriage of Sinclair’s CBS affiliates and MyNetwork program distributors. One month earlier, Nexstar said it reached an agreement with YouTube TV to offer 60 of its CW-owned stations.

Streaming services were once thought to be a refuge for television viewers who wanted to escape the high costs of traditional cable and satellite service. But there are already signs that carriage deals between broadcasters and online services are driving up streaming prices, too. Last November, Dish Network implemented a fee increase on its budget-conscious streamer Sling TV after negotiating a new agreement with Disney for its ESPN and other cable channels. Earlier this year, Fubo began charging a regional sports fee to offset costs associated with delivering that programming on a local level.

In the business of local television, network affiliates like ABC and Fox are typically on the same side as independent broadcasters like Nexstar and Sinclair. But the dueling coalitions have pitted local station owners against the affiliate networks whose programming they use as leverage in retransmission consent negotiations with distributors.

On Thursday, a spokesperson for the Coalition for Local News said they were aware that they now have a counterpart in their fight to change federal regulations, and they hoped the members of the Preserve Viewer Choice Act would reconsider whether they want to oppose their movement.

“We don’t doubt the members of this newly launched coalition value local news – some of them even own local news stations, albeit as relatively small parts of much larger corporations,” a spokesperson for the Coalition for Local News said in a statement emailed to The Desk. “But the current system, which cuts local broadcasters out of the negotiation process for distributing our stations on the fastest growing streaming platforms, puts local news in existential danger. So, instead of fighting us, we hope these companies will work with us to modernize the rules so that local news can endure during this time of immense change.”

But Harlow knows the kind of tactics that go into movements like the one spearheaded by the Coalition for Local News: For more than a decade, he worked as the vice president of government relations for CBS. (His employment started around the time CBS and Viacom were divorcing, and ended shortly after the two companies reunited.) Prior to joining CBS, he worked as the director of government relations for the National Association of Broadcasters, an industry lobbying group that counts major network owners and independent station groups among its members.

Harlow believes things could get worse for the business of streaming, with customers likely to face higher bills if the Coalition for Local News’ movement to reclassify streaming platforms under the same rules as cable and satellite companies is successful.

“We want to embrace the future of content that streaming enables, not be dragged backward to a time when choice was limited, costs were high, and access was controlled by a handful of distributors,” Harlow said. “These regulations could eliminate options for streaming consumers and risk reducing the amount of local content available online today.”

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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