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Cable Technology Feature Article

October 21, 2010

News Corp, Cablevision Dispute Hits Day Five

By Beecher Tuttle, TMCnet Contributor

The stalemate between News Corp (News - Alert).-owned Fox Networks and Cablevision continued on Wednesday, with neither side appearing to be any closer to caving to the other's demands.

Since midnight on Saturday, more than 3 million Cablevision customers in New York have been without Fox programming due to a contract dispute between the two companies. For some frustrated subscribers, the standoff could not have come at a worse time.

Instead of being able to watch New York Giants football games or the National League Championship Series, local sports fans who tune into Fox only see a repeating message from Cablevision, condemning News Corp for their greed.

Last year, Cablevision paid approximately $70 million for the right to broadcast 12 Fox channels. Officials with the cable company have said that News Corp is now asking for $150 million for access to the same programming.

Unfortunately for viewers, the two media giants have spent more time publicly berating each other than actually negotiating. Even before the blackout went into effect early Saturday morning, News Corp., took out an ad in the New York Times encouraging Cablevision customers to make the switch to DirecTV or Verizon.

On Tuesday, FCC (News - Alert) chairman Julius Genachowski publicly reprimanded both News Corp., and Cablevision for their negotiating tactics, and reminded them of their responsibility to consumers.

"I am deeply troubled that Cablevision and Fox are spending more time attacking each other through ads and lobbyists than sitting down at the negotiating table," Genachowski said. "The time for petty gamesmanship is over."

Certain members of the commission have even begun discussing the idea of proposing legislation that would allow them to step in and mediate contentious negotiations that leave the consumer on the losing end.

Senator John Kerry (D-Mass.) has outlined a draft reform bill that would grant the FCC the authority to intervene and force broadcasters to keep running programming while disputes are being worked out, according to the Washington Post.

However, some analysts believe that direct intervention by the federal government would not be a wise choice in this situation.

"Any attempt by the FCC to require News Corp., to restore signals to Cablevision would face a better-than-even chance of being reversed in court," Paul Gallant, an investment analyst at Concept Capital, told the Post. "It would also set a precedent of intervention that the FCC probably wishes to avoid."

If Cablevision and News Corp., don't reach a deal shortly, millions of subscribers may miss the entire World Series and a large portion of the football season.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf