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LOCAL CHOICE Bipartisan Proposal for Discussion

LOCAL CHOICE is an evolution of the existing retransmission consent regime to a simpler approach
designed to put more power in the hands of the viewer. LOCAL CHOICE empowers consumers by
allowing them to choose the commercial broadcast content that they want to pay for as part of their pay-
TV subscription, while ensuring that local broadcasters continue to receive full value for their content.
It is transparent, easy to understand, and respects consumer choice. LOCAL CHOICE gets rid of
blackouts, makes sure that broadcasters are fairly paid, and puts viewers in control by giving them
meaningful choice over their programming options and offering more opportunity to control the cost of
their pay-TV subscriptions.

The Basics

LOCAL CHOICE pays broadcasters. Local broadcast stations will retain advertising revenues and
be fully compensated for their programming at a market-based rate preserving the dual revenue
stream that broadcasters believe is vital to the health of their business.

LOCAL CHOICE empowers broadcasters. Local TV stations still have two choices to reach pay-
TV subscribers. First, local broadcasters can demand under existing law to be delivered to pay-TV
subscribers for free. Or, under LOCAL CHOICE, they are automatically offered to all pay-TV
subscribers, who can opt to subscribe to the local commercial broadcast station for the fee set by that
station. In addition, free over-the-air signals will still be available.

LOCAL CHOICE is simple. Local TV stations set their own price and sell directly to consumers,
who make the choice whether or not to pay for that channel as part of their pay-TV package.
Complicated and contentious retransmission consent disputes will become a thing of the past no
more blackouts of local broadcast programming.

LOCAL CHOICE promotes localism. Local broadcasters will be directly rewarded by pay-TV
subscribers for offering relevant and compelling local content, and no longer face the threat of
negotiations with large MVPDs that may depress their real market value.

LOCAL CHOICE preserves the consumer viewing experience. Local TV stations retain their
channel position, so that consumers know where a station is located on the channel lineup.
Consumers will continue to get their full broadcast lineup unless they affirmatively decide not to buy
a station. Consumers will not face blackouts or the resulting loss of local news, weather, and sports
programming.

LOCAL CHOICE has absolutely no effect on public television stations, other noncommercial
educational stations, and any station electing must carry status, such as religious broadcasters.

LOCAL CHOICE is a win for consumers. Consumers choose whether to pay for their local TV
stations (no more hidden retransmission consent costs on their monthly pay-TV bill) or view them
through the free always on over-the-air broadcast signals.


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How LOCAL CHOICE Works

LOCAL CHOICE does not change the essential features of the retransmission consent system.
Local broadcast TV stations retain the same absolute right to demand to be delivered to all pay-TV
subscribers for free, or as they do now, they can seek compensation for retransmission of their
programming by an MVPD (multichannel video programming distributor, aka pay-TV system) to
their subscribers.

A local broadcast TV station sets a price that an MVPD subscriber must pay to receive its channel
from his or her MVPD. The broadcaster may change its price annually, and the price is the same for
all MVPD subscribers in the local broadcasters market.

All MVPDs in the local broadcasters market are required to make the broadcast signal available to
their subscribers at the broadcaster-set price. MVPDs cannot mark up the price and must remit the
fees they collect to the local TV station.

An MVPD subscriber may decide which, if any, LOCAL CHOICE broadcast channels they wish to
pay for and receive.

In order to protect local TV channel availability, MVPDs will not be able to require subscribers to
purchase non-broadcast programming in order to receive local broadcast channels through LOCAL
CHOICE. Local stations also will appear on the same channel they do today so that the consumer
viewing experience is retained. In addition, free over-the-air signals will still be available.

The cable basic tier and satellite carry one, carry all requirements remain otherwise unaffected, so
local must-carry channels, such as religious stations; PBS stations; and PEG (public, educational,
and government access) programming will continue to be carried like they are today.

To make the transition seamless for current MVPD subscribers, an MVPD cannot remove a local
broadcast channel from its line-up unless and until the viewer actively chooses not to buy that
channel.

LOCAL CHOICE ends some of the most troubling aspects of the present retransmission consent system
for consumers. Importantly, (1) it ends blackouts associated with contentious retransmission consent
negotiations; (2) it requires every local broadcast TV station to be made available to MVPD subscribers;
(3) it guarantees viewers have transparency on retransmission prices; and (4) it gives viewers more
control over their MVPD subscription.

At the same time, it preserves fair compensation for broadcasters in fact, it allows them to freely,
fairly, and transparently value their programming. It also incentivizes broadcasters to deliver locally-
oriented content and programming that their local consumers want to watch (and purchase). The
competition between local stations also could spur new innovation in broadcasting and reinvigorate key
national broadcasting values like localism and serving the public interest.