In October 2023, the Federal Communications Commission (FCC) proposed a rule addressing channel blackouts. The rule would require cable providers to offer customer rebates when channels are unavailable for over 24 hours due to a contract dispute. While some might see these rebates as fair, this rule ignores the realities of the market in that it creates rules for cable providers for similar content would not apply to streaming services. Effectively, this rule is playing favorites.

On examination, the rule proposal unfairly disadvantages cable companies in negotiations with channel providers by putting the burden of stalemates on the cable providers. At no point in the notice does it address the content-provider side of the disputes that lead to channel blackouts.

By putting a new financial burden on cable companies, the rule would impact contract negotiations, creating an environment where content providers, like Disney, can demand higher retransmission fees. These are fees, paid by cable providers, have already risen without the need for this advantage. As fees increase, they are passed through to consumers in the form of higher subscription prices.

This rule could exacerbate existing market trends. The largest paid TV providers are consistently losing subscribers, with a net loss of 1,730,000 subscribers in the second quarter of 2023, with about 5,360,000 unsubscribing in the past year. This decline is happening alongside the growth of subscription video streaming services such as Netflix and Hulu, with 83 percent of US households subscribing to at least one primary provider.

While they offer different models for their services, traditional cable providers and streaming services compete for the same TV viewers. Rules that impede one without addressing other services is tantamount to picking winners and losers.

The flaw in this approach is highlighted by the unequal treatment of cable providers and streaming services. Content comes and goes on streaming services, like Netflix, to the point where there are websites to show what’s new and what’s being dropped. If the proposed rule were industry-neutral, it would also advocate for Netflix users to rebate subscribers when The Office was moved to Peacock.

Instead, the rule shouldn’t be applied to any industry, but it especially shouldn’t be applied unevenly. Companies on both sides have incentives to maximize the agreement to meet their consumers’ needs best. The government shouldn’t interfere with these negotiations.

Trey Price is a technology policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information, visit or follow us on Twitter @ConsumerPal.