Live TV streaming services may have to pay more fees to the Federal Communications Commission if local TV station owners get their way. In total, it could cost live TV streaming services an extra $16.4 million. If this happens, it could put more pressure on live TV streaming services who have already jacked up their own prices.
This comes as local TV station owners earlier this month 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 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.
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.
The Coalition, made up of 600 local TV stations owned by groups like Nexstar, earlier this year put out a new statement to back their push to change the FCC rule.
“The problem is that right now streamers secure the right to carry local stations not from the stations themselves, but rather through deals cut directly with the national networks—which in some instances are outrageously owned by the same entity,” the group said in a statement on their website. “As a result, the networks decide both how much streamers pay for local stations and how much of that value actually makes it to local stations. This system only exists because streamers are not yet subject to the same regulations that require traditional pay-TV providers like cable and satellite companies to negotiate directly with local stations.”
The FCC making such a move would dramatically change how the agency 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.
Back when live TV streaming was new, the services each needed to go to every local TV station and strike a deal to stream their version of ABC, CBS, FOX, and NBC. This was slow and meant many locals would be missing live TV services, so they agreed to let the parent companies behind ABC, CBS, FOX, and NBC negotiate on their behalf to make one deal that covered all of the affiliates.
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. They hope to keep the system as it is now, where live TV streaming services are not treated like cable companies. This will allow them to make single deals with national broadcasters and avoid paying the $16.4 million in fees every year.