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Federal regulators will explore whether they can do more to protect consumers from losing their television signals because of disputes over the fees that subscription-video providers pay broadcasters for their programming.
Wednesday’s announcement by the Federal Communications Commission comes on the heels of a high-profile spat between Cablevision Systems Corp. and News Corp.’s Fox network. That impasse left 3 million Cablevision subscribers in the New York area without Fox programming for 15 days — including through two World Series games — after the broadcaster pulled its signal in October.
Cablevision had called on the FCC to prohibit Fox from withholding its signal and to require binding arbitration. But the agency remained on the sidelines during the dispute. FCC Chairman Julius Genachowski argued that under existing law, the commission had very limited authority to get involved in what were essentially private business negotiations. Genachowski said Congress should consider changing that.
In the meantime, the agency will examine what role it can nevertheless play in allowing fees “to be set by market forces while protecting the interests of consumers,” William Lake, head of the FCC’s media bureau, said in a speech Wednesday.
Among other things, the agency will study what it can do to ensure that both sides negotiate in good faith, and it will consider rules that would require consumer notification when talks break down and a signal could get pulled.
The dispute between Cablevision and Fox was the latest in a series of high-stakes standoffs over programming fees over the past year. Broadcasters have been demanding more for their signals as advertising revenue has dropped off, and they warn that if they are not paid enough, they would no longer be able to invest in high-quality content, including sporting events and local news.
But cable companies and other pay-TV providers complain that existing government rules favor broadcasters in these so-called “retransmission consent” negotiations because they can pull their signals — which provides leverage, particularly right before a high-profile event.
“Broadcasters’ demands for dramatic fee increases and their recurring blackout threats are causing significant harm to the public,” Time Warner Cable Inc. said in a statement.
Pay-TV providers want the FCC to adopt new rules that would prohibit broadcasters from interrupting signals during negotiations or before popular events, and mandate binding arbitration in disputes. Given the FCC’s position that it has limited authority, however, Congress has been looking at the issue.
Broadcasters, meanwhile, insist that the existing rules are working just fine.
“Injecting Washington into private business negotiations . only serves to embolden pay-TV companies,” the National Association of Broadcasters said in a statement.
Copyright © 2010 The Associated Press