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Local Broadcast Surcharge

What is the Local Broadcasting Station Surcharge?

Local broadcasting stations such as ABC, CBS, Fox, and NBC require significant payment from cable service providers to retransmit their programming. This substantial cost has necessitated that we have a broadcast surcharge to help cover a portion of these rapidly increasing costs. The current Local Broadcasting Station Surcharge is $22. As a cooperative, South Slope established this surcharge to cover the cost of the channels delivered to you, not to increase revenue. In addition, many TV networks are continuing to impose significant rate increases annually to carry their networks. We will continue to negotiate to keep costs as low as possible to allow us to provide you with a high-quality, affordable service.

Is this cost new and different from what I have been paying for in the past?

These broadcast signals were historically made available to South Slope at low cost to no cost. In recent years, local broadcasting stations have demanded increasingly larger payments for carriage of their networks. In 2018, we implemented a local broadcast surcharge to cover a portion of these costs.

Is this a government tax or fee?

This surcharge is not imposed by the government. This is separate from cable television franchise fees and taxes incurred by local, state, and federal governments.

Are other cable companies charging these same fees or just South Slope?

The majority of cable companies are now passing along whole or partial surcharges to their cable customers to assist in recovering retransmission costs from local broadcast TV stations.

Are all local broadcast or network-affiliated TV stations charging South Slope?

At this time, the majority of local TV stations require significant payment from any cable service provider to retransmit their programming and it is a portion of their charges that are reflected in the Local Broadcasting Station Surcharge.

Can you tell me what one TV station costs?

Our contracts prohibit us from providing information by individual TV stations.

Why can broadcast TV stations charge for the carriage of their signals?

Broadcast TV stations distribute their signals over the air, using the free spectrum granted to them by the federal government. In effect, taxpayers are subsidizing the distribution of broadcast, or “network-affiliated,” TV signals. These same broadcast TV stations are then allowed by the government to charge cable and satellite companies for their signals — and if we (the cable operator) don’t agree to pay, broadcasters can force us to drop their channels, thereby adversely impacting our customers. We are in favor of changes to the law that created this situation.

Why do I pay for channels I don’t watch?

Cable TV providers are often required by contract to carry both the most-popular and least-popular cable networks. We pay a fee for every household who receives that channel, regardless of whether anyone in that household watches the channel. Content creators and TV networks set rules in the contracts that dictate how their channels/programs are sold to the consumer, including what networks must be sold together, where the channels are positioned and which cable packages can contain their channels. This often means carrying less popular and less viewed networks on the more popular cable packages. Both this and escalating fees, drive up your costs.

What is “Retransmission Consent”?

Retransmission consent refers to a provision of the 1992 United States Cable Television Protection and Competition Act that requires cable operators and other multi-channel video programming distributors to obtain permission from broadcasters before carrying out their programming. In exchange, a broadcaster may propose that the cable operator pay cash to carry the station or ask for other forms of consideration. The cable operator may refuse the broadcaster’s proposal and the broadcaster can withhold permission for the cable operator to carry the programming. It boils down to negotiation and a binding contract to arrive at an equitable agreement for all parties.

Unlike cable TV networks, broadcast TV stations distribute their signals over the air, using the free spectrum granted to them by the federal government. In effect, taxpayers subsidize the distribution of broadcast TV signals. These same broadcast TV stations are then allowed by the government to charge cable and satellite distributors for their signals — and if we don’t agree to pay, broadcasters will force us to drop their channels. It’s all part of a process known as “retransmission consent negotiations.”

More than 25 years later, the competitive environment for video distributors has changed dramatically. Companies that own the local broadcast TV stations are increasingly imposing huge demands for cash that drive up a cable, satellite, or telephone company’s costs of doing business, and this pricing ultimately affects customers. Cable operators cannot absorb these rapidly escalating fees paid to networks and sports channels, plus retransmission fees from local broadcasters. These fees comprise the largest costs in our business and are growing the fastest.

What can I do?

Broadcasters and politicians need to hear your opinion. You can write to your representatives in the House and Senate and let them know your views. They created these regulations and they can change them. You can also share your opinion with the following General Managers of our local broadcasting stations:

KWWL-NBC
Jim McKernan
319-363-1799

KGAN-CBS
Glen Callanan
319-730-3401

KCRG-ABC
Thom Pritz
319-399-5900

KFXA-FOX
Glen Callanan
319-730-3401

Visit TVonMySide.com for up-to-date information and solutions about TV network disputes.

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