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I see no problem with letting affiliates have exclusive rights to the areas that they actually serve OTA, since those viewers have a free back-up signal already if their service provider has a dispute. So, the retransmission consent locals are competing against their own free signal. What I do have a problem with is where the stations still have exclusive rights to areas within their DMA that are not served OTA. Those viewers are being unfairly held hostage. Many of those unserved areas are at the outer fringe of DMA's, where other market affiliates were able to claim Significantly Viewed status while they were still broadcasting in analog. With real-world digital OTA conditions today, those signals may not actually be available anymore, but they are still included on the Significantly Viewed List. In addition to the Significantly Viewed channels, cable providers in these same fringe areas long ago set the precedent for importing out-of-market affiliates there, using the cable distant network license. Cable providers have been slowly dropping many of those out-of-market channels, but they were available at one time. So, my solution would be to change the Significantly Viewed rules, to make it easier for satellite providers to carry Significantly Viewed channels, and to allow out-of-market channels that have historically been available from the local cable provider to also qualify for the Significantly Viewed List. This would help level the playing field. Of course, that still doesn't help in situations where the same owner is allowed to own affiliates of the same network in adjacent markets. So, some changes to the station ownership rules would also be needed.
 
I see no problem with letting affiliates have exclusive rights to the areas that they actually serve OTA, since those viewers have a free back-up signal already if their service provider has a dispute. So, the retransmission consent locals are competing against their own free signal. What I do have a problem with is where the stations still have exclusive rights to areas within their DMA that are not served OTA. Those viewers are being unfairly held hostage. Many of those unserved areas are at the outer fringe of DMA's, where other market affiliates were able to claim Significantly Viewed status while they were still broadcasting in analog. With real-world digital OTA conditions today, those signals may not actually be available anymore, but they are still included on the Significantly Viewed List. In addition to the Significantly Viewed channels, cable providers in these same fringe areas long ago set the precedent for importing out-of-market affiliates there, using the cable distant network license. Cable providers have been slowly dropping many of those out-of-market channels, but they were available at one time. So, my solution would be to change the Significantly Viewed rules, to make it easier for satellite providers to carry Significantly Viewed channels, and to allow out-of-market channels that have historically been available from the local cable provider to also qualify for the Significantly Viewed List. This would help level the playing field. Of course, that still doesn't help in situations where the same owner is allowed to own affiliates of the same network in adjacent markets. So, some changes to the station ownership rules would also be needed.
Sounds like we are not too far off on how we feel the solution should go. We can take some of mine and some of yours, and apply the parts we both agree on as well, and we have a dang good plan to fix this situation.
We could go the total government control route also, which i would never support, and say every major local, or every owner that owns a local channel is guaranteed Must Carry with a small change in the backend. Instead of not being able to ask for month, there would’ve a predetermined amount for each station, such as the big four get $0.50/subscriber, and stations of X public interest get $$0.Xx amount per subscriber per month. Never have a blackout, amounts are fixed so negotiations not necessary, and “fair” compensation for the actual product. Again, I would hate this route, but even it would be better than the BS we have today.
 
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I like parts of both of your suggestions...
* Limit how many stations a group can own (both in total and in a market).
* Set a limit in a DMA (this would be the hard part) so where OTA is not practical (again, would need to be defined), subscribers get locals for free.
* Set a fixed amount for subscribers. But, base it on ratings. The higher the ratings, the more the channel gets paid. % increases are also set, so there's no negotiation needed.

Obviously there would be a lot of details that need to ironed out.