Healthy Broadcast Stats Raise Questions on Need for Regulation

As the policy debate regarding how best to ameliorate what some style the “spectrum crunch” affecting wireless broadband providers plays out in Washington, D.C., TV broadcasters are trumpeting some new statistics that demonstrate the popularity of broadcast media with the general public.

Despite the advent of services like Hulu, broadcast consumption remains healthy–and may even be growing, according to former Senator and National Association of Broadcasters (NAB) President and CEO Gordon Smith.

“A Knowledge Networks study last year found that more than 17 million households representing 45.6 million consumers receive television exclusively through over-the-air broadcast signals, up from 42 million such viewers the previous year,” Smith wrote in an op-ed this week in Politico, adding that over-the-air-only viewing remains substantial in minority communities and among younger viewers.

“The OTA-reliant population includes one out of four Asian-American and Spanish-speaking households and 17 percent of African-American homes. Pay TV ‘cord-cutting’ is also a growing trend for younger viewers, and today one out of five adults ages 18-34 is broadcast-only,” according to Smith. Moreover, he argues, demand remains high among the overall population for prime-time broadcast shows, as well as major sporting and entertainment events like the Oscars and the Super Bowl.

While that has trade associations like NAB cheering, it also has others scrutinizing twenty-year-old TV marketplace rules wondering why broadcasters are insistent about preserving certain provisions that critics charge prevent a genuinely free market from operating. Such provisions, according to free market groups supporting legislation introduced by Sen. Jim DeMint (R-S.C.) and Rep. Steve Scalise (R-La.), include rules that allow broadcasters to force a cable or satellite firm to carry their signal (with some, non-fee type costs to the cable or satellite company). They also have retransmission consent rules which do not serve to bar unauthorized airing of broadcasters’ copyrighted content but, rather, narrowly define what matters can be negotiated between cable and satellite operators and broadcasters, with respect to signal carriage arrangements.

Proponents of the DeMint-Scalise legislation suggest that the broadcasters’ position is about maintaining the upper hand in a market that is highly regulated in their favor.

Others contend that the number of “over-the-air only” households is actually a little lower than NAB publicly claims, because households that only use services like Hulu would, for statistical purposes, qualify as broadcast-only–and that the broadcast industry therefore may not be as healthy as it claims and looking for a little regulatory insurance.

But even if this is the case, it’s hardly an argument for a regime which effectively acts as a bailout for a particular industry, say critics. Advocates of a free market approach, such as the National Taxpayers Union, Citizens Against Government Waste, and Americans for Tax Reform believe demolition of the existing regime would better benefit both business overall and consumers.

Expect broadcasters to push back hard on that argument, invoking figures relating to jobs in their industry and its dollar value to the economy as a whole–in both cases, points they are raising as part of the debate about spectrum allocation, as well.