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Posted at 03:53 PM ET, 07/24/2012

Senate asks: Do cable laws still make sense?

Senate lawmakers on Tuesday scrutinized two-decades-old cable and broadcast television laws, debating if the rules need updating or should be scrapped altogether as new online technology grows in popularity.


A screen grab shows the access to Netflix online, as displayed on a television screen, in Encinitas, Calif. July 25, 2011. (Mike Blake - Reuters)
In a hearing on the 1992 Cable Act, Senator John “Jay” Rockefeller (D-W.V.) blasted television providers for rising cable prices, forced bundles and disputes over retransmission agreements between broadcasters and cable providers that have left millions of customers in the dark during business standoffs.

Cable companies blame broadcasters for charging too much for their channels and forcing bundles of channels on them. Broadcasters say it is expensive to create shows and they need to be compensated fairly.

“Overheated rhetoric alleging greed and bad faith is little comfort for someone paying for service they are not getting,” said Rockefeller, adding that cable providers should refund consumers when channels are turned off during fee disputes.

The review of the Cable Act is part of a series of hearings in Congress to reevaluate the role of government laws amid massive shifts in the video market. On the one hand, there are no laws for online video providers such as Netflix who enjoy few obligations but struggle to broker deals for content on their platforms. On the other hand, cable and broadcast network firms subscribe to many rules on channels they must provide to each other and competitors such as satellite firms. Cable and broadcasters are struggling to maintain their grip on television consumers who are looking for free or cheaper content online.

Rockefeller and Sen. John Kerry (D-Mass.) said local broadcasting is a public service that should be preserved. But they agreed that disputes over retransmission consent agreements — obligations by cable companies to pay broadcast networks to carry their channels — have spiralled out of control into high-stakes business battles.

Kerry pointed to proposed changes in those rules at the Federal Communications Commission for potential solutions.

But some lawmakers said those rules should be scrapped altogether.

Sen. Jim DeMint (R-S.C.) said it may be time to rethink the whole 1992 law. He said broadcasters shouldn’t be protected by government rules. Instead of new rules, broadcasters and cable companies, he said, should be stripped of rules in the same way online video providers are.

“We need a simpler playbook for all market participants,” DeMint said. “We should create a deregulatory parity.”

Related:

Aereo CEO on dismantling television industry as we know it

Viacom and DirectTV reach 7-year agreement

Verizon-cable deal held up over competition concerns

DOJ investigates cable firms’ limits to online video

By  |  03:53 PM ET, 07/24/2012

 
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