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Cable Technology Feature Article

November 01, 2010

TV Blackout of World Series Games Shows Broadcasters Have Upper Hand in Disputes

By Ed Silverstein, TMCnet Contributor

Millions of TV viewers living in the metropolitan New York area missed the first two games of the 2010 World Series because of a fee dispute between a television network and a cable company.

The conflict, according to The AP, underscores the point that recent TV blackouts and the lack of government intervention suggests that broadcasters have the upper hand over TV signal providers when it comes to negotiating fees.

Cablevision Systems (News - Alert) Corp., tested the limits of government intervention in October, with its many calls for the Federal Communications Commission to step in and force News Corp (News - Alert).'s Fox to keep providing its broadcast signal while it pressed for arbitration in the fee dispute, the AP said.

Fox refused and the FCC simply suggested entering mediation if both parties were willing to participate.

Without a deal, Fox blacked out its signals to three million Cablevision subscribers for 15 days, through two games of baseball's World Series. On Saturday, Cablevision finally accepted terms it said were "unfair" for the sake of its customers, the AP said.

The FCC (News - Alert) said that its hands were tied. “Under the present system, the FCC has very few tools with which to protect consumers' interests," FCC Chairman Julius Genachowski (News - Alert) said in a letter to Sen. John Kerry, D-Mass."Current law does not give the agency the tools necessary to prevent service disruptions."

Fox said in a statement Sunday that "this entire dispute was solely about Cablevision's misguided efforts to effect regulatory change to their benefit.”

The AP explained that the relevant law is the Cable Television Consumer Protection and Competition Act of 1992. It allows broadcasters like Fox, ABC, CBS and NBC to choose between forcing a TV signal distributor like Cablevision to carry its local TV station, thus boosting its audience, or bargaining for the best rate it can for so-called "retransmission consent.”

The law heavily favors broadcasters in negotiations because they have the ability to black out signals, and subscribers are hard to win back if they switch TV signal providers, according to the AP.

The American Cable Association, a group of smaller cable operators representing 7.6 million subscribers, said the fight to change an 18-year-old law wasn't over and it said it remains within the FCC's powers to adopt regulations to prevent signal blackouts, the AP said.

Both Genachowski and Sen. Kerry have called for reforms of the current system.

Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf