Now that the political conventions and summer Olympics are over, the obvious lesson is that given attractive programming, cable TV can draw audiences as effectively as broadcast television. If Fox News Channel can outdraw NBC even for an hour, and Bravo can score record numbers with Olympic events, then there is a credible case that basic cable TV will soon be ready to stand toe-to-toe with broadcast.
We believe the long-term trend is clear. Basic cable now has sufficient infrastructure, distribution and brand identification to be a ratings contender any time it has strong programming.
Broadcast’s reversal of fortunes can be partly attributed to an unequal playing field. Basic cable often operates with a dual stream of revenues from advertising and fees paid by operators.
However, that all pales in comparison with the impact of content regulations that force broadcasters to follow stricter rules than basic or pay cable in terms of indecency, public interest requirements, children’s programming and other issues.
In recent months we have seen the burden on broadcasters grow heavier. It has come into sharp focus as the Federal Communications Commission prepares to issue stiff penalties in response to the Janet Jackson Super Bowl incident. The $550,000 fine that is expected against the CBS-owned stations, as first reported in TelevisionWeek (Aug. 23), could not be levied on cable. Unlike broadcast, which uses public spectrum, people have to pay for cable. As a result, cable is for the most part beyond the jurisdiction of the FCC.
Now, with the enormously expensive digital transition impacting broadcasters as well, the industry finds itself at a crossroads. There is a real need to set politics aside and find a fresh approach to regulation. One way to do that would be for the FCC to provide incentive for broadcasters to expand with new digital channels. We believe regulators should mandate full carriage of all digital channels. That would speed the transition and help stations manage the cost of digital conversion. It would also level the playing field by giving broadcasters more shelf space in viewers’ homes with more opportunities to compete and sell advertising.
We recognize that cable has a right to seek compensation for carrying additional signals on its limited spectrum space. However, we hope cable’s gatekeepers-the multiple system operators-will recognize that to be competitive, especially against satellite, they need to offer all local signals in each market.
The goal of government should be to make free television available to as many viewers as possible. But the effect of the regulatory structure currently in place is to drive viewers away from broadcast to cable and satellite. If regulators continue to turn their backs on the need for a fair and competitive environment, they will condemn broadcast television to a second-class future.