Retransmission consent was adopted in response to the "must carry" rules that required cable operators to carry all significantly viewed local stations. Stations could either keep their must carry status, as many smaller, independent stations did, or negotiate with cable operators. Initially, cable carriers' reaction was to refuse to pay for broadcast programming. John Malone, head of cable giant TeleCommunications Inc. refused to pay to carry broadcasters' content saying, "I don't intend to pay any money... I will scratch backs." Instead of monetary payment, some broadcast networks agreed to distribute secondary channels. America's Talking, FX, and ESPN2 all originated through retransmission consent deals in the early 1990s. Many PBS stations received additional local channels.
Legislative history
Legislation governing the retransmission of broadcast television content by satellite companies is required to be renewed on a regular basis. As of 2018, the legislation has been enacted four times. These acts renewed statutory licenses that allow satellite TV companies to retransmit broadcast stations to their customers:
Retransmission consent has drawn criticism from the cable operators who redistribute programming, and therefore must seek consent from the broadcasters for their program content. Cable programmers have argued that there is a "shift in leverage toward broadcasters" within the market since introduction of retransmission compensation. Broadcasters typically claim that the programming they provide costs money, and these retransmission fees allow them to provide this expensive programming. Further, the Cable Act created retransmission consent in order to fix a market imbalance and the marketplace and contract disputes should be addressed in the marketplace.
Programming disruptions
Cable operators typically claim during a carriage dispute that the broadcasters are forcing the viewing public to pay for content that is essentially given away for free to those who use an antenna to receive the station. Alternatively, broadcasters have argued that the free market approach discourages carriage disputes. In a 2013 op-ed, former FCC commissioner, Robert McDowell, argued:
TV stations make more money as more people see their shows, thus creating an incentive to distribute their product as widely as possible. These same market forces also create a disincentive for broadcasters to withhold their signals from distributors like cable and satellite companies.
