There is nothing wrong with TV stations charging cable and satellite companies who repackage popular broadcast channels and sell subscriptions to the public. It’s sort of like saying because you can get tap water for free, bottled water should be free too. Yet there are advocates in Washington from the cable and satellite industries who are seeking governmental intervention to referee private negotiations between TV stations and cable and satellite companies when the vast majority of deals get done without any disruptions in service to the public.

So what is really going on here? Cable and satellite companies are engaged in a not-so-transparent effort to arbitrage the FCC process to involve the government in order to gain leverage in retransmission consent negotiations. At the same time, a real marketplace for broadcast programming is emerging as Congress intended. Senator Rockefeller (D-WV) appears willing to take the bait and to authorize Congress to give the FCC authority to become such a referee. He said at a Congressional Hearing yesterday that “If you fail to fix this situation, we will fix it for you.” While Congress has many priorities, it’s unclear whether imposing more governmental regulation on the marketplace for retransmission consent – a system that works -- is likely to be high on the list given the shift in the House to a Republican majority and the general mood of the country. Moreover, there are more compelling communications law issues, such as finding more spectrum for broadband or clarifying the FCC’s authority to regulate the Internet, that are in need of governmental action.

This strategy is puzzling. The unintended consequences of inviting government regulation of the marketplace, in the absence of a market failure, could lead to a-la carte pricing regulation as consumers demand to know why they are paying for cable and satellite programming services they never watch. The truth is that broadcast programming is provided to cable operators at bargain basement prices relative to cable programming services and yet remains some of the most-watched and popular programming. It is likely to remain so even in this new media era as TV stations continue to lead in providing local news, emergency information and other programming to their communities.

Congress wisely carved a narrow role for itself in 1992 when it gave TV stations the option of negotiating carriage fees or demanding mandatory carriage. Calls for the government to require mediation or interim carriage during a dispute would mean that more, not fewer, deals, would get bogged down as the players attempt to game the FCC process to their advantage. These proposals are not justified by marketplace failures, changed circumstances or any other grounds. Stripped down, it’s clear this is nothing more than one private party seeking additional unwarranted negotiating leverage against another through governmental regulation in the guise of protecting the public.