Analyst: Gov't Has Little Muscle in Cablevision/Fox Fight - Broadcasting & Cable

Analyst: Gov't Has Little Muscle in Cablevision/Fox Fight

But motivation could be to force reform
Author:
Publish date:

As Cablevision Systems' carriage
battle with Fox Networks moves through its sixth day, media analyst
Rich Greenfield added some needed perspective: despite the cries of
outrage from several dozen legislators and regulators, the government
has little power to change or enforce much of anything in this fight.

Fox pulled its broadcast stations
WNYW and WWOR in New York and WTXF in Philadelphia and cable networks
Fox Deportes, NatGeo Wild and Fox Business Network from Cablevision
on Oct. 16 after it failed to reach a carriage agreement with the MSO.

The two sides were supposed
to resume negotiations Thursday, but according to Fox neither side had
spoken to the other as of 3:24 p.m.

In the meantime, more than
50 state, local and federal legislators have joined Cablevision's cry
for binding arbitration to settle the dispute and even Federal Communication
Commission chairman Julius Genachowski has asked the two sides to end
the "gamesmanship," that has characterized the dispute.

In his blog post Greenfield
notes that in reality, there is very little the government can do -
and he points out correctly that Congress created the retransmission
consent "mess" itself by its passage of the 1992 Cable Act. The
only thing the FCC can do in these situations is to ensure that the
parties are "negotiating in good faith." And even if it is determined
that either side is negotiating in bad faith, the agency has no authority
to take any action.

Now Cablevision isn't really
asking for government intervention - its calls have been for Fox to
agree, as it has, to submit to binding arbitration. But past retransmission
consent battles between other broadcasters and other MSOs have included
pleas for some kind of government reform. And it seems that Cablevision
would not reject any moves by Congress to change retrans regulations.

And that could happen - earlier
this week U.S. Sen. John Kerry (D-Mass.) introduced draft legislation
that would update the 1992 Act as it relates to retrans - just don't
expect it to happen soon, Greenfield wrote.

"With Congress currently
out of session and a lame-duck session set to resume later this year
(not to mention the potential impact of Republicans claiming a greater
share of Congress this November), we would not rely on Congress to act
any time soon to help Cablevision and the broader multichannel industry,"
Greenfield wrote.

Greenfield also seemed surprised that Cablevision did not take a simple
action that he said could solve their retrans problems for the foreseeable
future - handing out $30 digital TV antennas to its 3 million customers.
Sure, it would cost Cablevision about $90 million for the equipment,
but it would allow its customers to receive Fox programming and that
of any other over-the-air station for free. For that one-time price,
Cablevision or any other MSO could stop paying retransmission consent
to any broadcaster, which would save it hundreds of millions of dollars
over time.

Greenfield suspected that the
main reasons Cablevision and other providers don't hand out antennas
en masse are inconvenience - it's a bit of a hassle for customers to
switch TV inputs -- it would restore lost ad revenue to he broadcaster
and it hurts the cause for government intervention.

That last point could be the
real reason behind the ongoing battle, according to Greenfield's blog
post. The analyst sees little upside in this fight for the MSO - Fox
isn't going to budge and probably can't because of "most favored nation"
clauses in its other MSO contracts. Cablevision and its ruling Dolan
family could simply be digging in its heels to force broader legislative
reform.

"While the Dolans are not
normally known for 'taking one for the team,' the only advantage we
see to the current battle they are waging is to draw political attention
in hopes that Congress at some point in the future decides to amend
the 1992 Cable Act to diminish the current leverage held by broadcasters."

Fox declined to comment on
Greenfield's post and Cablevision did not immediately return a request
for comment.

In the meantime, Cablevision
baseball fans will likely miss what could be the deciding game in Major
League Baseball's National League Championship Series tonight at 8 p.m.
(the San Francisco Giants lead the best-of-seven series three games
to one).

Related