October 1999
"Priming The Pump": The Role of Retransmission Consent in the Transition To Digital Television
By Stuart N. Brotman

VII. POLICY IMPLICATIONS

The discussion above sets forth why marketplace forces are taking hold through digital retransmission consent agreements between broadcasters and cable operators and expanded high-definition program offerings. It shows the historic and current linkage between critical mass programming that "primes the pump" for receiver sales because cable subscribers receiving ample digital programming may not be satisfied by its reception on an old analog set.

Equally important, these developments are consistent with legislative intent articulated when Congress enacted the original retransmission consent provisions for analog television. Senator Daniel Inouye (D-HI), the author of the 1992 Cable Act's retransmission consent provisions noted that they "were designed so as to avoid creating a complex set of governmental rules to promote the carriage of local broadcast signals." ²³ Retransmission consent "permits the two interested parties - the station and the cable system - to negotiate concerning their mutual interests. It is of course in their mutual interests that these parties reach an agreement; the broadcaster will want access to the audiences served by the cable system, and the cable operator will want the attractive programming that is carried on the broadcast signal." ²⁴

In the digital domain, similar incentives to reach successful retransmission consent agreements are present. In the analog world, if broadcasters have programming cable customers want, they will elect retransmission consent. If it less desirable, they will elect must-carry. Retransmission consent thus works to promote programs that will attract viewers, and if digital, may convince viewers to buy digital receivers that can display such programs in full resolution. If such programming won't convince consumers to buy digital receivers, must-carry programming, which does not have the same market attraction, hardly can be expected to spur digital receiver sales. Moreover, in light of the major agreements already finalized, it is clear that the marketplace continues to be a better way to produce win-win outcomes for broadcasters and cable operators, with viewers and consumers as the ultimate beneficiaries. Put simply, retransmission consent works in the real world.

²⁴ Id.