Last year a major fight started at the FCC between local ABC, CBS, FOX, and NBC owners and streaming services like YouTube TV. At the core of this issue is whether streaming services should be considered “cable TV” by the FCC and, therefore, regulated like Comcast or Spectrum. This move could generate a lot of money for local TV stations by allowing TV stations to set their own terms with streaming services instead of having to rely on deals made by Paramount for example.
Earlier this year, the National Association of Broadcasters, which represents local TV station owners, announced that in 2024, one of its main goals is to get the FCC to change the rules about how live TV streaming services are regulated. Now, this week, the Affiliate Associations that represent owners of local ABC, CBS, and NBC stations have joined the push to demand the FCC reclassify streaming services like YouTube TV, Hulu, Fubo, and others as cable TV companies.
So why is this happening? In July of 2023, local TV station owners formed the Coalition for Local News to push the FCC to force cord cutting services to be treated like cable TV companies. If the FCC agrees to change the rules, it will force YouTube TV, Hulu, Fubo, and other services to strike deals directly with the owners of local TV stations instead of the networks. This would allow local TV stations to have more control over how much money they get from streaming services like YouTube TV. Currently, local TV stations have to accept deals made by Paramount, for example, that negotiate on behalf of all local TV stations. Now under this rule, YouTube TV would need to reach a deal with each individual local TV station owner.
To help stop that, recently, the Preserve Viewer Choice Coalition, whose members include YouTube TV, Fubo, Hulu, and others like Roku, pushed back, saying the FCC can not legally turn them into cable TV companies.
According to a memo sent to Cord Cutters News by the Preserve Viewer Choice Coalition they argue that the FCC has no rights to reclassify streaming as cable TV. According to these streaming services even FCC Chair Jessica Rosenworcel says that is not possible. According to them, under the 1984 Cable Act and the 1992 Cable Act, the FCC can not legally turn streaming services like YouTube TV into cable TV companies.
“The FCC has clearly stated it does not have the authority to implement new regulations on streaming services and Americans across the political spectrum strongly oppose regulating streaming services like cable, which would drive up costs, hurt content creators, and restrict the availability of local news.” The Preserve Viewer Choice Coalition said in a memo sent to Cord Cutters News.
How are streaming services, like Fubo, fighting back?
That same month, YouTube TV, Fubo, Vidgo, Roku, Paramount, Disney, NBCUniversal, and others formed the Preserve Viewer Choice Coalition to stop this move.
“Cable and satellite regulations were enacted decades ago, long before most Americans had even heard of the internet. It’s almost laughable that the same policies would be appropriate in an era with nearly unlimited viewing options,” the group said at the launch and has since reiterated several times.
This fight is putting local TV station owners, like Nexstar, at odds with network owners, like ABC Disney NBCUniversal’s Comcast. Under the existing rules, ABC and NBC can sign contracts covering all their affiliates—even the affiliates they don’t own—with streaming services like YouTube TV. If local TV stations win, it would dramatically change how the FCC regulates live TV streaming services. Primarily, it would force the live streaming services to negotiate directly with the owners of local TV stations, like Nexstar.
Fubo, Hulu, and other streaming services wouldn’t be able to strike deals directly with Paramount for all CBS stations, for example. Instead, they will need to go to each individual owner of each local TV station. This is what cable TV companies must do, and it is what live TV streaming services will do if the rules are changed.
The group of local TV stations owners argue that this change is needed to protect local news.
YouTube TV and others are pushing back. “Local news thrives under the current system. It took mere months for streaming services to offer local news in every U.S. market, while it took decades for traditional providers to do the same under the old rules and regulations some large affiliates now want to apply to streaming services. Requiring streaming platforms to negotiate carriage individually in all 210 designated markets will lead to less local news available for streaming viewers.”
Would this cost cord cutters more money?
If local stations get their way, it could also mean you will pay more for services like YouTube TV, Fubo, and Hulu + Live TV. If the owners of local ABC, CBS, FOX, and NBC stations succeed, live TV streaming services would need to pay a $1.23 fee per subscriber every year to cover the FCC regulatory fee imposed on cable TV companies, according to Ted Hearn, a policy expert who had worked for ACA Connects, who posted the stat on X (formerly Twitter). Based on a Leichtman Research Group study that found 13.4 million subscribers to live TV streaming services, the fees would add up to $16.4 million.
Why is this happening?
They are pushing this to ensure local news will be offered on streaming services. But you can’t ignore the money side of the issue. Recently, multiple local station owners have been pushing for increases in carriage fees. Currently, they must accept what the parent networks agree to with streaming services. This rule change would allow them to decline offers they don’t like.
What does this mean for cord cutters?
Local channels have argued the deals they got with live TV streaming services were too low. A change would mean a new round of negotiations for all the local channels, which could lead to blackouts if agreements aren’t made. It could also result in higher costs for streaming services, and potentially higher costs for consumers if they’re passed down. The FCC hasn’t looked at the issue yet, but it’s one on a lot of peoples’ radar.
For now, it looks like local station owners are ready for a long fight to get what they believe will be a better deal for them. The live streaming services are likewise gearing up to maintain the status quo.
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Update: We updated our story to include a link to the FCC filing. We also updated the story for spelling and contact.