Some background:
"....Although cable television service providers routinely carried local affiliates of the major broadcast networks, independent stations and affiliates of minor networks were sometimes not carried, on the premise it would allow cable providers to instead carry non-local programming which they felt would attract more customers to their service.
Many cable operators were also equity owners in these cable channels, especially Tele-Communications, Inc., then the nation's largest multiple system operator (MSO), and had moved to replace local channels with equity-owned programming (at the time, TCI held a large stake in Discovery Communications). This pressure was especially strong on cable systems with limited bandwidth for channels.
The smaller local broadcasters argued that by hampering their access to this increasing segment of the local television audience, this posed a threat to the viability of free-to-view broadcast television, which they argued was a worthy public good.
Local broadcast stations also argued cable systems were attempting to serve as a "gatekeeper" in competing unfairly for advertising revenue. Some affiliates of major networks also feared that non-local affiliates might negotiate to provide television programming to local cable services to expand their advertising market, taking away this audience from local stations, with similar negative impact on free broadcast television.
Although cable providers argued that such regulation would impose an undue burden on their flexibility in selecting which services would be most appealing to their customers, the current "must-carry" rules were enacted by the United States Congress in 1992 (via the Cable Television Protection and Competition Act), and the U.S. Supreme Court upheld the rules in rejecting the arguments of the cable industry and programmers in the majority decision authored by Justice Anthony Kennedy. ....
A side effect of the must-carry rules is that broadcast networks cannot charge cable television providers license fees for the program content retransmitted on the cable network, except potentially as a part of retransmission consent agreements in lieu of must-carry.
...... Station operators are allowed to demand payment from cable operators, or negotiate private agreements for carriage, or threaten revocation against the cable operator (see Sinclair, Time Warner Cable). Must-carry is a privilege given to television stations, not a cable company. A cable company cannot use must-carry to demand the right to carry an over-the-air station against the station's wishes."...If a broadcaster elects retransmission consent, there is no obligation for the cable system to carry the signal.[2] This option allows broadcasters who own stations, including those affiliated with major networks such as CBS, NBC and ABC or Fox to request cash or other compensation from cable or satellite providers for signals. These networks have usually attempted to gain further distribution of cable services and/or co-owned low-power television stations in which they also hold an equity position rather than direct cash compensation, which cable systems have almost universally balked at paying....."
Must-carry - Wikipedia, the free encyclopedia
