Back when I was spending more time writing about FCC regulatory issues, I came across a sleepy backwater known as television signal retransmission. Actually, there’s a surprisingly interesting history behind the retransmission of over-the-air TV signals into cable and satellite networks. When I was immersed in the laws, FCC regulations, and court cases, I learned the whole framework was a balancing act of trying to give a helping hand to local TV stations–goes by the fancy name of “localism”–while protecting the copyright interests of the big networks. But now that the Aereo case has made its way to the Supreme court, I am forced–gulp–to take another look at retransmission.
There were and still are some good intentions behind it all, but I eventually lost interest in the subject. At some point, it became for me a giant food fight between cable players, local stations, the traditional broadcasters, and of the new Internet startups over, let’s face it, a legacy idiot box.
Here’s how it all started. In mid-century America, cable TV (or CATV as it was then called) programming was mostly over-the-air signals that were piped into a giant copper coax network. Congress eventually stepped in–circa 1970s–and tried to bring some order to the significant copyright issues that were at play. To help this fledgling industry, they said cable companies could have a compulsory license: they make a single payment (based on a percentage of revenues) to the US Copyright Office and then get the benefits of local TV programming.
To balance this out, the FCC later gave a boost to local TV stations by saying they could ask for a must-carry option (without payment) from their new cable competitors thereby allowing their signal to be retransmitted and seen by more eyes. The regulatory rules also limited the wholesale importation of out-of-market signals into the cable network– another competitive boost to the local TV stations. Eventually the rules were all sorted out when Congress came up with a real law, the Cable Act of 1992. By the way, those crazy public access channels are one of the results of the must-carry regime.
The 1992 law also gave TV networks and local stations the option of entering into a retransmission consent agreement wherein they could negotiate with a cable network over charging for its programming. In the bigger markets, the traditional broadcasters had valuable content that they didn’t want to give away without getting cash in return. The cable companies saw this differently–why do we have to pay for something that everyone gets for free? Anyway, the 1992 law says that TV stations can decide every three years whether to choose the must-carry option or enter into a retransmission consent agreement.
As we now know, these agreements have been contentious, resulting in programming blackouts
Enter the Internet. For the TV broadcasters, the Intertoobz was seen as another revenue sinkhole. It would only take someone retransmitting the free TV signals over this new network. And that’s exactly what short-lived IVI tried to do. Claiming they were a cable company and therefore entitled to the aforementioned compulsory license, IVI took free over-the-air programming and streamed it to their subscribers’ browsers and mobile phones. No cash went directly to the content providers. IVI just wrote small copyright checks to the US government, which distributed the pot of money.
The courts didn’t buy this Internet-era retransmitters bold claim that it was copper cable bizness and ultimately put an end to IVI.
Does anyone know how to play this game of Internet retransmission? It looks like Aereo has done it right. Their brilliant idea it to effectively position their subscribers’ TV antennae into the cloud. Aereo data center racks are packed with cards containing dime-size antenna–one per subscriber– along with DVR capabilities. So if you want to record tonight’s Seinfeld, you bring up your Aereo app to set the channel and time, and then later you stream the video to your favorite device.
And what does Aereo pay to the broadcasters? The same as what the average consumer with a TeeVee and digital antenna does–bupkes. Broadcaster are claiming they are owed copyright fees because the Internet retransmission constitutes a public performance. A private performance of a work of art–playing music or watching TV in our house–is a private performance, which does require a copyright payment. Aereo has survived every court challenge, and now has the opportunity to make their case to the Supreme Court.
The big TV broadcasters are now saying that if they don’t get their way in the Supreme Court, they may just stop offering a free over-the-air signal. Unlikely.
Their real-problem is that they’ve been late to the game in figuring a way to monetize their programming on the Intertoobits. There is some hope. When I last wrote about retransmission, it was in the context of a company called Syncbak. Syncbak localizes a retransmitted TV signal so only those subscribers who are entitled to get the programming receive it. Local TV stations then avoid messy copyright issues, and so broadcasters are happy.
Since talking to Syncbak’s founder, Jack Perry, CBS now has a stake in his company and its technology is now being tested in 70 markets by all the major networks.