Why your Cable and Satellite bill keeps increasing?
The simple answer is “retransmission fees” keep going up. But what the heck are “retransmission fees” and why do they keep driving up my Comcast and Xfinity bill?
The foundation for retransmission fees can be found in the Radio Act of 1927 and later codified in the Communication Act of 1934. Section 325(a) of the 1934 act (amended in 1992) states that no broadcast station may “rebroadcast the program or any part thereof of another broadcasting station without the express authority of the originating station.”
So basically, Comcast / XFinity pays broadcast networks (ABC, NBC, CBS, FOX) and cable networks (ESPN, CNN, MSNBC, HGTV and hundreds of other channels for the rights to “re-transmit” the signals coming from these media companies. And then they pass those costs straight through to you and your family.
Types of Retransmission Fees
- Broadcast retransmission fees – per subscriber fees paid by cable and satellite providers to broadcast networks (ABC, CBS, NBC, FOX) for the rights to re-transmit the Super Bowl, the Oscars, Young Sheldon, the nightly news, This Is Us, NCIS, Chicago Fire, etc.
- All these channels and their shows are available in stunning HD for free. All you need is a professionally installed outdoor or attic HD antenna to guarantee perfect signal all the time
- Carriage fees – per subscriber fees paid by cable and satellite providers to cable content networks (ESPN, Fox News, CNN, HGTV, MSNBC, etc)
- Online cable channel packages like Sling and Philo are much cheaper than traditional cable and satellite. Combine Sling or Philo with an HD antenna and you legally and permanently eliminate and drastically reduce retransmission fees and carriage fees.
- Affiliate fees – fees paid by local broadcasters to affiliated national broadcasters
Fees make Cable and Satellite bills expensive
On a typical Comcast bill, broadcast fees cost the consumer $18.15 every month. Again, paying these fees is not necessary. 80M households currently pay a minimum of $14B annually in fees for content that can be acquired legally, for free via an HD antenna. Since these retransmission negotiations occur behind closed doors, we cannot know the exact number. Industry insiders put the number at ~$12B but back of the napkin math indicates this number is higher.
In 2019, revenues from all the total of all retransmission fees (broadcast, carriage, and affiliate) topped $47 billion. These fees, paid by you, accounted for more than half of total revenues for a number of cable networks including MSNBC, CNN, Fox and many others.
Disputes between Comcast / XFinity and the content providers over these fees adversely affect the consumer via blackouts. If the cable and satellite companies and the broadcasters do not reach an agreement every few years on the retransmission fees, then pay TV consumers will be cut off from access to their favorite shows and sporting events. This is in addition to Cable and Satellite’s annual price increases.
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