Congress must explore consumer impact before deciding fate of basic tier
By Robert C. Kenny | February 11, 2015
In the coming weeks the US House Energy and Commerce Committee is expected to unveil a comprehensive legislative package of video reforms meant to update the nation’s Communications Act to reflect a modern and robust marketplace that, over the past decade, has been built on a healthy array of digital and high-speed broadband platforms.
The Committee is centering its focus on changes to the regulatory regime for video services that hinge on greater consumer access, choice and affordability to the television programming they prefer to watch through this expanding collection of service options. There is also concern in some sectors of industry that many of the local market rules that now exist to ensure consumers’ access to local broadcast TV programming are “outdated” and in need of an overhaul in today’s marketplace.
Lawmakers, however, as part of the Communications Act update must ask:
Are the current Congressional rules that help advance localism and preserve cable customers’ ability to access local broadcast TV programming at affordable monthly prices beneficial in today’s marketplace? Given the current state of the US video marketplace and consumer trends, the answer is yes.
In addition to the lifeline reporting that local TV stations provide to America’s television viewers 24/7 in times of emergency, there is a legitimate conversation that must be led by lawmakers and policymakers regarding the economic impact that the elimination of the basic tier will have on the millions of US households that today subscribe to cable TV’s most affordable service option.
Moreover, is cable’s push for elimination of this consumer-friendly policy really warranted in today’s marketplace? The answer is no, particularly in light of cable operators’ continued local market dominance over the nation’s video services. One could argue that elimination of the basic tier provision on cable systems would hurt consumers seeking affordable access to broadcast TV stations, particularly in smaller markets.
Today, a single cable company provides service to 50 to 90 percent of all paid television subscribers in one-quarter of all local television markets in the US.
Yet, despite this continued local market dominance, cable operators are urging Congress to eliminate the rule. The cable industry has failed to provide an adequate justification in the public interest as to why this rule should be eliminated.
By eliminating the basic tier provision, cable operators in effect could remove local broadcast TV stations from the cheapest cable programming package and force low-income households to pay more than three times the amount to get it back as part of more expensive expanded basic or premier programming packages.
In fact, a subscription to the expanded basic cable programming bundle – which is one tier higher than the basic tier – has increased by approximately 188 percent since 1995, further illustrating the tremendous barrier to affordability for seniors on fixed incomes and low-income subscribers who have historically relied on the cable’s basic tier to access local broadcast TV news and programming.
US households that subscribe to cable’s basic tier may not be able to afford higher-priced cable programming packages, nor have affordable alternatives for service in smaller TV markets. This was the basis under which Congress enacted this important consumer protection in the first place.
In fact, cable companies could choose to place local TV stations on separately priced tiers, forcing customers to pay extra for the full complement of local broadcast television and access to diverse local news reporting and real-time emergency alerts and warnings in their communities.
The potential impact on millions of US cable subscribers must be fully explored as part of Congressional efforts to update the Communications Act before a final policy decision is made on the fate of cable’s basic tier.
With more consumers considering cutting the cable cord altogether or choosing more affordable bundled programming packages, the consumer benefits associated with the basic tier have never been more apparent and it remains a viable option for US cable subscribers.
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Kenny is director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations, and other independent organizations. He formerly served as press secretary at the FCC.
