Earlier this year, Local TV station owners formed a new 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 would force YouTube TV, Hulu, Fubo, and more to strike deals directly with the owners of local TV station owners instead of the big networks.
Now, the Coalition, made up of 600 local TV stations owned by groups like Nexstar, last week put out a new statement to demand change to how the FCC regulates live TV streaming services.
“The principal regulations that govern the relationship between local news stations and the providers that distribute TV to American households were codified in the early 1990s. Back then, few Americans had email addresses, let alone 24/7 access to the internet like we do today.” The coalition said in a statement sent to Cord Cutters News. “Modernization does not mean subjecting new market entrants to old rules. Reclassifying live streamers (vMVPDs) as “multichannel video programming distributors” (MVPDs) for the purpose of the FCC’s retransmission consent rules would simply require streamers to negotiate with local broadcasters for the distribution of their content in good faith, in line with the well-understood bargaining rules set before streaming existed.”
If local TV stations win, it would dramatically change how the FCC regulates live TV streaming services. It would also force them to negotiate directly with the owners of local TV stations like Nexstar. If that change happens, Fubo, Hulu, and others 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 have to do, and it is what live TV streaming services may have to do soon.
If local stations get their way it could also mean you will pay more for services like YouTube TV, Fubo, Hulu + Live TV, and more. If the owners of ABC, CBS, FOX, and NBC local stations succeed, live TV streaming services would need to pay a $1.23 fee per subscriber every year for 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.
Back when live TV streaming was new, they needed to go to each local TV station and strike a deal to stream their local ABC, CBS, FOX, and NBC. This was slow and meant many locals would be missing live TV services. When cord cutting was new, locals agreed with the parent companies behind ABC, CBS, FOX, and NBC to let them negotiate on their behalf to make one deal that covered all locals.
Now Nexstar Media Group, Sinclair, E.W. Scripps, and Gray Television have announced that they want to cut out the big networks and negotiate directly to bring their locals to streaming services. They hope to get better deals than what the parent companies have agreed to. They argue that the current situation is unfair to local station owners.
“So yes, viewers may see some local stations on streaming services. But these stations are being carried on the basis of unfair agreements, which cut local broadcasters out of the negotiating process and leave stations with less resources to produce local news.” The Coalition For Local News said.
To fight back, major media companies and streaming services like Fubo have created their own coalition to lobby the FCC not to change the rules.
This new coalition of streaming services said cord cutters already have easy access to local news and that there is no need to force odl cable TV rules on streaming services. In a statement sent to Cord Cutters News, the group said: “It has taken mere months for streaming services to offer news in every US market, while it took decades for traditional providers to do the same under the old rules and regulations broadcasters now want to apply to streaming services.”
So 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 of the local channels, which could lead to blackouts if agreements aren’t made. It could also result in higher costs for streaming services.
If the FCC changes the rules, this puts services like Hulu, YouTube TV, FuboTV, and more in a tough spot. First, they would have agree to the demands of locals for more money and raise their prices or drop those channels. Something is likely to result in blackouts like what we are seeing with DIRECTV right now.
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.