Fox’s Fight With Time Warner Sheds Light on Cable Fees – NYTimes.com.
Over the holidays, a friend asked me why we don’t receive the new broadcast HD channels over cable or satellite TV. The article linked above in part offers a peak at the answer.
The short version of the story is, a long time ago when cable was new, broadcasters wanted to charge cable companies to retransmit their signals. At the same time, they wanted to be included in the cable lineup, because they realized that any cable subscriber would potentially miss out on all of their programming. The solution was a quid pro quo or back scratching arrangement, where cable providers retransmit all local television at no cost to the stations.
Now that local stations can transmit multiple signals, with some in HD, the debate is being reopened.
As the article points out:
Some over-the-air stations started to wring fees out of smaller carriers several years ago. For stations, the fees normally amount to nickels, dimes and occasionally quarters for each subscriber each month. But Fox is asking for much more.
The companies declined to comment about the specifics to the negotiations, but people close to the matter confirmed the $1 demand by Fox’s owned and operated stations.
The unfortunate result is that consumers will be the losers in the form of higher fees, or uneven coverage of local channels. The move towards internet-fed television with an antenna for local TV might quicken because of this.