Policy Documents

Will High Retransmission Consent Fees Hamper a Successful Incentive Auction?

Randolph J. May, and Gregory J. Vogt –
December 11, 2013

In this analysis of technology delivery, the authors contend that in recent years, over-the-air broadcasters have been able to exact increasingly higher fees for permitting Multichannel Video Program Distributors (“MVPDs”) , such as cable and satellite operators, to carry their TV programming. Both sides of the retransmission fee debate complain about the other parties’ relative market power, and policymakers complain about the consumer disruption that TV blackouts cause. Consumer welfare is promoted when consumers are allowed to choose what video programming they want to watch, regardless of the technology platform over which such programming is delivered. This consumer choice is best effectuated when consumers have access to various delivery mechanisms. Instead of focusing on consumer access, however, the current retransmission consent battles have focused more on a particular MVPD’s access to TV programming and the broadcaster’s provision of such programming. A broader focus would more likely enhance overall consumer welfare.