Senators Take Aim at Rising Cable Bills

The draft legislation could slash TV station revenue.

Key senators unveiled draft legislation Friday aimed at reducing skyrocketing cable TV bills.

But the losers of the bill wouldn't be cable giants like Comcast, but rather broadcast networks like NBC and Fox, as well as their local affiliates.

The Satellite Television Access and Viewer Rights Act from Sens. Jay Rockefeller and John Thune contains several provisions aimed at reducing the leverage of the broadcast stations in negotiations with cable providers.

TV broadcasters are expected to rake in $4.3 billion in fees from cable companies this year, and the total could reach $7.6 billion by 2019, according to an analysis by SNL Kagan. Broadcast stations are free over-the-air to anyone with an antenna, but cable companies have to pay to carry the stations.

Cable providers argue that the rising revenue for TV stations ultimately means pricier cable bills for consumers. Broadcasters argue the revenue amounts to only a few dollars on each customer's monthly bill, and that cable companies wouldn't pass any savings on to consumers anyway.

There isn't much time left in the year for controversial legislation, but Rockefeller and Thune have a plan to jam their bill through Congress. They're attaching the provisions to a reauthorization of a satellite TV law that's set to expire at the end of the year. The law allows about 1.5 million satellite TV subscribers in rural areas to access broadcast channels, and many lawmakers consider the reauthorization bill "must pass" legislation.

With billions of dollars at stake, the move sets up a major lobbying battle between the cable and broadcast industries in the waning days of the congressional session.

The draft bill from Rockefeller, the Democratic chairman of the Senate Commerce Committee, and Thune, the panel's top Republican, would allow consumers to drop any broadcast channels that they don't want to pay for. Currently, cable providers are required to include all broadcast stations in their basic tier of channels. The Senate bill would also bar stations from grouping together in negotiations for carriage deals with cable providers.

The legislation would direct the Federal Communications Commission to consider whether to ban stations from pulling their online videos during negotiations with cable companies. Last year, CBS blocked its online videos for Time Warner Cable customers when the companies were unable to agree to a new contract. The move ensured that viewers couldn't just watch their favorite CBS shows online while Time Warner Cable refused to pay to carry the stations. Critics claimed the tactic violated the spirit of an open and free Internet.

The broadcasters have come out swinging against the bill. In a statement, Gordon Smith, the CEO of the National Association of Broadcasters, said the bill "appears to confer unfettered and unprecedented authority for government intervention into private marketplace negotiations."

He argued that dropping the requirement that cable companies carry broadcast stations in the basic tier would endanger "access to lifeline information." Local broadcast stations often provide their communities with information on natural disasters and other emergencies.

TVFreedom, a broadcast group, called the bill "a pay-TV giveaway."

But the American Television Alliance, a cable advocacy group, said the bill would "bring relief to TV viewers who have suffered from skyrocketing fees and blackouts."

The Senate Commerce Committee is planning to vote on the bill on Sept. 17, according to industry sources. The House passed a version of the legislation in July that would make much more modest changes aimed at reducing cable bills.