Anti-siphoning law
Encyclopedia
Anti-siphoning laws and regulations are designed to prevent pay television broadcasters from buying monopoly
rights to televise important and culturally significant events before free-to-air
television has a chance to bid on them. The theory is that if such a monopoly was allowed, then the poor would be unable to view the important and culturally significant events. Generally the laws allow pay-TV to bid for such monopoly rights only if free-to-air television has declined to bid on them. Anti-siphoning in the United States
was introduced by the FCC
in 1975 and was soon overturned as unconstitutional. Australia's Anti-siphoning laws
were introduced in 1992 and remain in force to date. They also affect free-to-air digital-only services
, and require that certain programmes be simulcast
on analogue
channels.
the Federal Communications Commission
refused to regulate it. In 1958 the FCC ruled that cable TV was not a common carrier
and thus is not subject to FCC jurisdiction. In 1960 the FCC lobbied against placing cable TV under its jurisdiction, arguing that the administrative burden is inadequate to low perceived threats of unchecked cable development. In 1965 the FCC changed its stance and imposed must-carry
rules, requiring cable providers to carry local free-to-air channels, and banned importation of distant channels that duplicated content available on local free-to-air channels.
In the end of the 1960s the public and the government raised concerns that cable operators can outbid free-to-air channels and "siphon" popular content, first of all sports, off the free air. Specific events like the Super Bowl
were deemed particularly vulnerable due to greater inelasticity of demand
.
In 1975 the FCC imposed anti-siphoning regulation that virtually prohibited operations of sports and film channels. Precisely, the cable channel could not devote more than 90% of its time to film and sports, and could not broadcast films less than three years old. Specific (i.e. annual) sporting events could not be "siphoned off" by cable at all if they had been broadcast on free airwaves during any of the previous five years. Cable coverage of regular season games in popular championships was limited so that only a fraction of all games could be shown on cable. Should sports coverage on free-to-air channels decrease, stipulated FCC, cable operators had to decrease their sports programming proportionately. Administrative record, however, did not support FCC allegations of "siphoning".
The Department of Justice
and a number of cable providers contested the FCC ruling in courts as unconstitutional. In 1977 the DC Circuit Court consolidated these cases in Home Box Office vs. the FCC and found that the FCC has trespassed over the rights guaranteed by the First Amendment
. The court ruled that cable bandwidth is not a scarce resource, thus it is not subject to limitations allowed by the Red Lion vs. the FCC
ruling. The court applied the O'Brien test
(the FCC failed two of its four "prongs") and found that the degree of limitation of free speech imposed by the FCC was inadequate, "grossly overboard" and thus "arbitrary, capricious and unconstitutional".
The National Football League
imposed protections for the broadcast network affiliates in all 30 metropolitan markets. Should a game be on pay-television, the channel in question would be blacked out in the local market, and the NFL will offer the game via a syndication package to the two markets in question.
In the 2010's, the issue has grown drastically. Two of the four tennis majors (Kia Australian Open and Wimbledon, The Championships),one of golf's four majors (The Open Championship), and college football's Bowl Championship Series became exclusively pay-tv only events. NASCAR's Chase, which had a greater balance towards network television, moved mostly to pay-tv. Playoff games (except the championship level) are mostly on pay-tv today in MLB, NBA, and NHL. Most MLB, NBA, and NHL teams have gone to exclusive pay-tv contracts.
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
rights to televise important and culturally significant events before free-to-air
Free-to-air
Free-to-air describes television and radio services broadcast in clear form, allowing any person with the appropriate receiving equipment to receive the signal and view or listen to the content without requiring a subscription or one-off fee...
television has a chance to bid on them. The theory is that if such a monopoly was allowed, then the poor would be unable to view the important and culturally significant events. Generally the laws allow pay-TV to bid for such monopoly rights only if free-to-air television has declined to bid on them. Anti-siphoning in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
was introduced by the FCC
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
in 1975 and was soon overturned as unconstitutional. Australia's Anti-siphoning laws
Australia's Anti-siphoning laws
Anti-siphoning laws in Australia regulate the media companies' access to significant sporting events. In 1992, when the country experienced growth in paid-subscription media, the Parliament of Australia enacted the Broadcasting Services Act that gave free-to-air broadcasters preferential access to...
were introduced in 1992 and remain in force to date. They also affect free-to-air digital-only services
Digital television
Digital television is the transmission of audio and video by digital signals, in contrast to the analog signals used by analog TV...
, and require that certain programmes be simulcast
Simulcast
Simulcast, shorthand for "simultaneous broadcast", refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. For example, Absolute Radio is simulcast on both AM and on satellite radio, and the BBC's Prom concerts are often...
on analogue
Analog television
Analog television is the analog transmission that involves the broadcasting of encoded analog audio and analog video signal: one in which the message conveyed by the broadcast signal is a function of deliberate variations in the amplitude and/or frequency of the signal...
channels.
United States
In the early days of cable televisionCable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...
the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
refused to regulate it. In 1958 the FCC ruled that cable TV was not a common carrier
Common carrier
A common carrier in common-law countries is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport...
and thus is not subject to FCC jurisdiction. In 1960 the FCC lobbied against placing cable TV under its jurisdiction, arguing that the administrative burden is inadequate to low perceived threats of unchecked cable development. In 1965 the FCC changed its stance and imposed must-carry
Must-carry
In cable television, governments apply a must-carry regulation stating that locally-licensed television stations must be carried on a cable provider's system.- Canada :...
rules, requiring cable providers to carry local free-to-air channels, and banned importation of distant channels that duplicated content available on local free-to-air channels.
In the end of the 1960s the public and the government raised concerns that cable operators can outbid free-to-air channels and "siphon" popular content, first of all sports, off the free air. Specific events like the Super Bowl
Super Bowl
The Super Bowl is the championship game of the National Football League , the highest level of professional American football in the United States, culminating a season that begins in the late summer of the previous calendar year. The Super Bowl uses Roman numerals to identify each game, rather...
were deemed particularly vulnerable due to greater inelasticity of demand
Elasticity (economics)
In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...
.
In 1975 the FCC imposed anti-siphoning regulation that virtually prohibited operations of sports and film channels. Precisely, the cable channel could not devote more than 90% of its time to film and sports, and could not broadcast films less than three years old. Specific (i.e. annual) sporting events could not be "siphoned off" by cable at all if they had been broadcast on free airwaves during any of the previous five years. Cable coverage of regular season games in popular championships was limited so that only a fraction of all games could be shown on cable. Should sports coverage on free-to-air channels decrease, stipulated FCC, cable operators had to decrease their sports programming proportionately. Administrative record, however, did not support FCC allegations of "siphoning".
The Department of Justice
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
and a number of cable providers contested the FCC ruling in courts as unconstitutional. In 1977 the DC Circuit Court consolidated these cases in Home Box Office vs. the FCC and found that the FCC has trespassed over the rights guaranteed by the First Amendment
First Amendment to the United States Constitution
The First Amendment to the United States Constitution is part of the Bill of Rights. The amendment prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering...
. The court ruled that cable bandwidth is not a scarce resource, thus it is not subject to limitations allowed by the Red Lion vs. the FCC
Red Lion Broadcasting Co. v. Federal Communications Commission
Red Lion Broadcasting Co. v. Federal Communications Commission, 395 U.S. 367 , established the doctrine that broadcast television stations are full First Amendment speakers whose editorial speech could not be regulated absent good reason...
ruling. The court applied the O'Brien test
United States v. O'Brien
United States v. O'Brien, 391 U.S. 367 , was a decision by the Supreme Court of the United States, which ruled that a criminal prohibition against burning a draft card did not violate the First Amendment's guarantee of free speech...
(the FCC failed two of its four "prongs") and found that the degree of limitation of free speech imposed by the FCC was inadequate, "grossly overboard" and thus "arbitrary, capricious and unconstitutional".
The National Football League
National Football League
The National Football League is the highest level of professional American football in the United States, and is considered the top professional American football league in the world. It was formed by eleven teams in 1920 as the American Professional Football Association, with the league changing...
imposed protections for the broadcast network affiliates in all 30 metropolitan markets. Should a game be on pay-television, the channel in question would be blacked out in the local market, and the NFL will offer the game via a syndication package to the two markets in question.
In the 2010's, the issue has grown drastically. Two of the four tennis majors (Kia Australian Open and Wimbledon, The Championships),one of golf's four majors (The Open Championship), and college football's Bowl Championship Series became exclusively pay-tv only events. NASCAR's Chase, which had a greater balance towards network television, moved mostly to pay-tv. Playoff games (except the championship level) are mostly on pay-tv today in MLB, NBA, and NHL. Most MLB, NBA, and NHL teams have gone to exclusive pay-tv contracts.