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There once was a "must carry" rule for all cable systems which required every cable service in the US to carry all local TV stations in a given area; however, that law was changed some time ago, with the result that every US cable system is now free to add or drop any channel (even major network affiliates), for any reason.
Before 1992, cable companies did not have to pay to carry OTA Stations. They didn't even need their permission. Cable companies used antennas to capture local TV stations and simply retransmited the OTA signal on its cable system. The cable system was under no obligation to carry local TV stations, and in my market (New York City), they didn't carry the 6 lightly viewed UHF Stations, but did carry WTBS from Atlanta, WSBK from Boston, WVIA from Scranton, and WTAF from Philadelphia. (To be fair, the cable system was only 36 channels, and carrying all 14 local stations would leave little room for the PayTV networks - they showed what people wanted to see. Synd-ex and market exclusivity ended the widespread improtation of out-of-market signals.)
The Cable Act of 1992 changed how terrestrial television stations are carried on cableTV systems. This act defined two ways for a terrestrial TV station to get on a cable system's broadcast basic programming tier. (The broadcast basic tier is the minimum level of service. You MUST subscribe to this tier in order to add any other video service, and therefore pay the retransmission fees.)
Method 1: "Must Carry". A local television station can elect "must carry". If the station elects to do so, it forgoes any re-transmission fees. The cable company "must carry" the station. It cannot be dropped from the broadcast basic lineup.
Method 2: "ReTransmission Consent". The local television station and the cable operator negotiate a per-subscriber fee for carriage on the broadcast basic tier. It is these fees which have driven up the cost of broadcast basic itself and the institution of the broadcast TV surchage. The cable company can only carry the station if a rate is negotiated. If a station demands a high-fee, the cable company can walk away and not carry the station. This is the primary reason why there are blackouts of local stations on cable systems. TV station wants $2 per subscriber per month; cable company is only willing to pay $1 per subscriber per month. TV Station says no. Station goes dark. (The average per-month fee a TV Station received in retransmission consent was $1.07 - back in 2014. I am sure it is much higher now.)
Retransmission fees make up a sizeable portion of a station's revenue. A television station wants their fees - the content they provide isn't cheap. So unless the station is very low-rated, or they are showing very cheap programming (brokered time, old re-runs, infomercials), they aren't going to elect "Must Carry". A station may choose Must Carry if they are difficult to receive with an antenna, as they will get more eyeballs on the channel and therefore can sell ads at a higher rate.
The fees collected by O&O (owned and operated) stations go right to the Netowrk. An affiliate station is charged for its programming by the Network, so the fees collected by the affiliate are passed up to the Network.
I have no sympathy for stations which "pull" their signal. There shouldn't be a reason why a cable subscriber should be forced to pay for the same content the content owner gives away for free to those who elect to use an antenna. Until the Cable Act / FCC rules are changed, stations will exploit the fact that every video subscriber is required to pay for broadcast basic (and the re-transmission fees) in order to receive any additional video programming. I recommend you write your congressman, and suggest revisions to the Act which would force terrestrial TV Stations which elect re-transmission consent fees to be moved off the broadcast basic tier, either to a higher tier or be sold a-la-carte.
This is not Spectrum's (or any other operator's) doing. It's the terrestrial stations leveraging existing law to force cable customers to pay for their content, whether it is wanted or not.
Question,
Suppose the Cable Act of 1992 had never passed. We would never have station owner blackouts over contract retransmission fees, correct? Would there be any downside if the act had not passed?
Satch