The National Association of Broadcasters has tacitly thrown its support behind a group that’s trying to convince the Federal Communications Commission to place cable-style regulations on live-streaming services like YouTube TV, Fubo and Hulu.
“The FCC should refresh the record in its virtual (multichannel video programming distributor) proceeding to ensure it reflects the impact of streaming on viewer access to local stations,” NAB CEO Curtis LeGeyt said in prepared remarks during a Wednesday House Communications and Technology Subcommittee hearing titled, “Lights, Camera, Subscriptions: State of the Video Marketplace.” While he didn’t go far as to advocate for full cable regulations, he said that the FCC needs to take another “look at viewer habits and assess the impact on localism.”
The comments mark the strongest support from the NAB for the Coalition for Local News, a group of more than 600 local TV stations. The group has advocated that so-called virtual MVPDs, or streamers like YouTube TV and Fubo, which offer a cable-like live-TV experience, should be subject to the same rules that require cable TV providers to negotiate with individual stations for distribution rights.
In response, big major players like Disney, Warner Bros. Discovery and Fubo banned together to create the Preserve Viewer Choice Coalition, which argues such a move would make it difficult for streaming services to negotiate separate deals with every local stations, leaving some blacked out.
The current system allows for a company like Fubo or YouTube TV to work with media giants like Disney, which acts as a proxy for its own ABC stations as well as the network of local ABC stations owned by Nexstar and other local broadcasting giants. Local stations, however, want their own seat at the negotiating table, and LeGeyt agrees.
“Our competitors have no obligations or incentive to provide the local news, weather, sports, public affairs or emergency information that our audiences rely on,” he said to Congress. “We offer a public service that our competitors do not replicate, yet we do all of this while competing with one arm tied behind our backs. To that end, more must be done to ensure fair competition and continued consumer access to our essential service.”
Sitting just two seats away was Fubo CEO David Gandler, who strongly opposed such a move, arguing the regulations would actually cause more blackouts and loss of local stations.
“It’s simply not possible to provide this kind of content to consumers if regulations require that we negotiate with each local station,” he said in prepared remarks. “The time and people necessary to complete these negotiations would allow us to focus on major media markets, leaving many local communities behind.”
He added that Fubo already pays significant retransmission fees for the right to offer those local channels. Raising fees would only hurt consumers, he argued.
“It’s a profoundly detrimental change to the current system where virtually anyone with broadband access can sign up for Fubo and access their local content,” he said.
But LeGeyt warned that the continuing shift of audiences from cable and satellite to streaming options will have an impact on retransmission fees that go directly to local broadcasters, hurting their ability to invest in community coverage.
“Without it, we look a lot like the local newspaper industry, and I think everyone in this room knows how that story is ending,” he said.
Local negotiation, however, would further complicate matters, according to Grant Spellmayer, CEO of ACA Connects, which represents local internet provider.
“Prices will go up and confused consumers will be even more confused and concerned,” he said.
Gandler echoed that prices will certainly rise because a company like Fubo will have to negotiate the same sports deal twice — one with the national broadcaster and a second with the local affiliate.
“All of those deals are specifically set up to expire right before football season,” he said.
On Thursday, the Coalition for Local News tweeted its support of LeGeyt, and called Gandler’s claim that local TV stations benefit from the current environment “false.”
Blackouts and More
The hearing didn’t just focus on the issue of whether streaming services should be treated like cable companies, but was a broader session to discuss the state of streaming media. To Gandler’s point, one of the big topics of discussion were the proliferation of blackouts, with the Disney-Charter dispute still fresh on minds, having been resolved on Monday, and the DIRECTV-Nexstar dispute still going on.
Representative Anna Eshoo, a Democrat from California, said it’s up to Congress to fix the blackout problem.
“It’s totally unfair,” she said. “It’s a took of negotiation by people who think of themselves as innovators.”
Spellmayer, meanwhile, said he’s focused on the trap where his members are squeezed by rising programming costs, with the options being to pass them along to consumers, going out of business or go through a blackout.
Gandler noted that the average Fubo customer watches 100 hours of programming in one month, and they like to have their content in one place.
“The bundle is still king,” he said.