There is a fight between streaming services, like YouTube TV and Sling TV, and local TV station owners. If local TV station owners get their way, Sling TV, YouTube TV, Fubo, and others may be reclassified as cable TV companies by the FCC. This would force Sling TV to add locals and may be even public access channels.
In July, local ABC, CBS, FOX, and NBC formed their own group called the Coalition for Local News to advocate that the FCC apply the same kind of cable TV–style regulations on cord cutting services. If the FCC agrees to change the rules, it will force YouTube TV, Hulu, Fubo, and other streaming services to strike deals directly with local TV station owners instead of the networks.
The Coalition for Local News, which is comprised of 600 local TV stations owned by groups like Nexstar, gathered some key allies when those 20 lawmakers sent their letter to the FCC, expressing concern that streaming services like YouTube TV could undermine local news if the agency doesn’t regulate them.
If local TV stations win, it would dramatically change how the FCC regulates live TV streaming services and give companies like Nexstar and Gray Television a seat at the bargaining table. YouTube TV, Fubo, Sling TV, and others wouldn’t be able to strike deals directly with Paramount for all CBS stations. 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 could do if the FCC considers this appeal.
If the FCC puts streaming services under the same rule as the 1992 laws that cover cable TV, it will force them to also offer all the major locals. This could force Sling TV to add locals to its streaming service, which would likely increase its price to consumers.
Under the 1992 cable TV companies must offer locals as part of their base package. That is why many cable TV companies offer small local-only TV packages. If Sling TV is forced to be treated as a cable TV company under the 1992 law it could impact how they offer locals.
“In a 2019 update, the FCC said cable TV operators are “generally required to offer a ‘basic tier’ of programming to all subscribers before they purchase additional programming.” The basic tier, the agency explained, includes “at a minimum” local TV stations and public access channels.” Said Ted Hearn, Editor of Policyband.
Sling TV could try to follow DIRECTV’s example and bundle talks for Sling TV with DIRECTV for local distribution under the 1999 satellite TV laws to try to avoid these issues.
A growing number of local TV station owners have complained that streaming services are not paying enough for their channels, and this could also drive up the cost of streaming services by forcing them to pay more to the FCC every year as cable TV companies.
For now, the FCC has not decided if it will investigate classifying streaming services as cable TV, although a growing number of groups, including local broadcasters and the National Association of Broadcasters, are asking them to do so.
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Update: We updated the story with info on the 1999 satellite law that could help Sling TV avoid this and the 1992 cable TV law.
Correction: We earlier incorrectly listed one of the 1999 laws as a 1992 law. We updated that and added a quote about the 2019 update that requires cable TV companies to offer a base package with locals and public access.