Comments Regarding Limitations on Programming Available Broadcast on Pay-TV Channels

Abstract

These comments are directed towards the concern of the Federal Communications Commission over developing rules with respect to subscription television (STV or Pay-TV) that would permit the development of the industry if it offered a net increment to the number of options and the diversity of programming available to viewers, but that would prevent the diversion of programming that is currently available to viewers over the free, over-the-air system to a pay mode. The premise of these comments is that the commission is obviously correct in its conclusion that viewers and, for that matter, American society would be unambiguously worse off if STV succeeded only in causing essentially the existing system of broadcasting simply to begin charging viewers for programs that they now receive free. A careful examination of the consequences of an all-STV system makes obvious the source of popular opposition to pay-TV and makes dubious the allure of such a system for some economists. The existing commercial broadcasting system generates consumer satisfaction of enormous value--worth perhaps as much as $20 billion annually—in providing free of charge its current array of mass-audience programming. To pay for exactly the same programming now available without charge would mean a massive reduction in the welfare of most families. The realization of this has generated political support for bans or limitations on the development of pay-TV and has moved the commission to try to develop a complicated web of antisiphoning rules intended to prevent the supplanting of the existing commercial system by subscription television.