Kerry: Fox/Cablevision Deal Is Relief, But...

Senator still thinks government intervention needed to protect consumers

By John Eggerton -- Broadcasting & Cable, 10/31/2010 6:02:10 PM

Sen. John Kerry (D-Mass.) said Sunday he was "happy and relieved" that Cablevision and Fox had struck a carriage deal Saturday, but that he still thought the government needs to step in to protect consumers.

Kerry has proposed legislation to that effect, and signaled that he still thinks it is necessary. While he said that media interests have every right to play hardball, he also suggested that government needed to step in anyway to protect consumers from being collateral damage in what he called "frequent games of high stakes chicken."

Saying he didn't think it was in anyone's interest to have such retrans stalemates play out regularly, Kerry suggested that, "at a minimum, Congress can bring greater transparency to this process and empower consumers with more information, and work to disincentivize high stakes conflict." Cablevision lost access to Fox TV station signals for two weeks during the latest such standoff.

"What I know is that this system is broken, and I think we're all better off if we have a dialogue about systemic reform and modernizing the law rather than just jumping into the fray and getting involved in each conflict in isolation," Kerry said, adding that he would work with the FCC and stakeholders on a bill.

FCC Chairman Julius Genachowski, who has expressed his own frustration with the consumer fallout from the Fox/Cablevision impasse, Friday said he agreed with Kerry that it was time for Congress to take a look at the retrans regime.

Kerry had plenty of company in suggesting the Fox/Cablevision deal should not signal a stand-down in the push for retrans reform.

"Fox demonstrated that federal retransmission consent rules encourage broadcasters to harm consumers by adopting a ‘blackmail or blackout' strategy intended to wrest excessive cash compensation from local cable operators," said American Cable Association President Matt Polka. "ACA commends Federal Communications Commission Chairman Julius Genachowski and Sen. John Kerry (D-Mass.), among others, for recognizing that Fox's 15-day blackout of 3 million Cablevision customers in the New York City market was the last straw and that Congress must step in..."

"We are pleased that consumers in the New York City area and in Philadelphia will be able to watch programming on the Fox channels, including the World Series and entertainment shows," said Public Knowledge President Gigi Sohn. "However, we worry that the lack of action and involvement from the Federal Communications Commission (FCC) does not portend well for consumers. Knowing that there was no pressure on the broadcaster to lower its demands, Cablevision conceded defeat, while claiming that they are paying too much for programming."

Cablevision asked the FCC to step in to mandate arbitration and put station signals back on the air during negotiations, but FCC Chairman Julius Genachowski advised them to reach their own deal.

Cablevision, ACA and Public Knowledge are all members of the American Television Alliance (ATVA), a coalition of cable operators, satellite carriers, telcos and others pushing the FCC to modify its retrans rules, which they say favor broadcasters.

ATVA minced no words in its reaction to the deal. "News Corp deserves no credit for ending its two week blackout of 3 million Cablevision households during the baseball playoffs and World Series and even bullying consumers by cutting off access to major websites," the group said in a statement. "The only way to guarantee broadcasters can't hold up viewers for ransom as a negotiating tool is for Congress and the FCC to change outdated rules."