Behind Rising TV Rates
and What You Can Do About It
Many are concerned
about the rising cost of their TV service. We at Nittany Media share
your concerns about this and would like you to understand what is
really behind this problem, as well as the need for legislative
reform to correct the inequities that drive it.
The reason our rates
have gone up is that the costs we are charged for cable TV networks
like ESPN, FOX Sports, CNN, TNT and MSNBC, as well as broadcast TV
stations have been rising dramatically in recent years. We have had
little choice but to pass a portion of these increases to our
subscribers. Frankly, these programming costs are getting out of
Media has been at the front lines of the fight to keep TV affordable,
having appealed to members of Congress for legislative reform of the
pay TV market. We can't do this alone. Now is the time for you to
join us in speaking up to our federal legislators asking for change.
is some important information about this issue and what you can do
with us to make a difference:
The video market has
dramatically changed since the Cable Reform Act of 1992. The laws
consent laws regulating the use of broadcast TV stations on cable TV
systems are now broken.
Rapidly escalating retransmission consent
fees: These are the fees that
broadcast TV stations charge cable operators like Nittany Media to
re-broadcast their free over the air
station on cable TV. According to SNL Kagan, broadcasters’
retransmission consent revenue jumped a whopping 1597%
since 2006 (from $215 million
to an estimated $3.648 billion in 2014, source American Television
Alliance). These outrageous increases are on the backs of cable
companies like Nittany Media and their subscribers.
- Blackouts: In
2013, millions of Americans went without access to their local
broadcast signals after TV station
owners cut off programming to cable
operators 110 times. This was a 817% increase over 2010.
practices: Separately owned, same
market broadcasters, who are supposed to compete against each other,
are colluding in the sale of retransmission consent to pay-TV
providers in a number of television markets by coordinating their
negotiations. Available evidence shows that when broadcasters engage
in this behavior, they can extract higher fees than if they
Unable to absorb these outrageous
higher costs, pay-TV providers Nittany Media have little choice but
to pass retransmission consent fees along to their customers.
sports programming market is also broken.
escalating sports fees: National sports networks (and regional
sports networks) aggressively bid against one another for the rights
to air the most popular sports leagues’ sporting events.
Networks bid extraordinary amounts knowing they can pass on their
costs to pay-TV providers like Nittany Media, who need to offer
their sports networks to remain competitive in the market.
Accordingly, ESPN is the most expensive cable network at $5.54 per
subscriber according to SNL Kagan. The fee is expected to grow to
$6.95 per subscriber by 2016.
to sell expensive sports programming on basic tiers: Despite
these high and escalating prices, sports networks require pay TV
providers like Nittany Media to put this programming on their basic
With the expensive sports programming on basic tiers, the high
costs for this programming is thrust upon all the subscribers of all
pay-TV providers, whether they want the programming or not.
Media would love to offer you our customer “a la carte”
channel selection (you pick and pay for only the channels you want).
After all, why should you pay for channels you don't want?
Unfortunately, program providers won't let us do that.
fewer, more powerful media companies control most of the cable TV
networks, we are faced with an “all or nothing”
programming proposition. For instance, the company that owns
Nickelodeon (Viacom) also owns MTV and forces us to carry (and our
customers to receive) both. This practice is known as program
don't have a choice, so you don't have a choice.
Nittany Media would like the freedom to offer you a choice in the
channels you receive. But a change in law is necessary to make that
Time for Reform Is NOW
from both parties now acknowledge that existing rules governing the
pay-TV market are antiquated and causing harm to consumers. Some
propose removing outdated rules to reduce regulatory impediments to
competition. Others talk about the need for new rules to ensure
there’s a more competitive market.
ask you to encourage the House Energy & Commerce Committee and
the Senate Commerce Committee to hold hearings on the following
1992 Cable Act, including the rules governing the retransmission
sports programming market and its impact on the rising cost of
pay-TV service in the basic tiers.
forced “bundling” of cable network channels, which
prohibits cable operators like Nittany Media to offer “a la
carte” programming to its subscribers.
are some helpful resources for Action: