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Cable Technology Feature Article

December 09, 2010

FCC May Offer Guidance to Help Prevent Future Impasses over Cable Fee Disputes

By Ed Silverstein, TMCnet Contributor

The fact that metro New York Cablevision TV subscribers missed the first two games of the World Series due to a fee dispute between Fox Television and Cablevision is just one example of a controversy that may lead to some possible action by the FCC (News - Alert).

A top FCC official said Wednesday that the commission is proposing new rules which would prevent broadcasters from removing signals from cable companies when the two sides are at an impasse over retransmission fees, according to a report from the New York Times.

As the law now stands, the FCC can’t order the two sides into binding arbitration or demand action that would prevent the service disruption.

One specific change may be the Federal Communications Commission will better define what negotiating in “good faith” means – something that both sides needed to be doing in a dispute such as the one between Cablevision and Fox.

That definition may come with new rulemaking.

“What we have is a form of regulated negotiation,” William T. Lake, head of the FCC’s media bureau, explained in a speech at the Media Institute earlier this week. “You can be forgiven if you see an oxymoron in that – something like managed competition, or friendly argument. But the Commission takes seriously its job of enforcing the duty to negotiate in good faith. Unfortunately, the good faith obligation does little to prevent impasses for negotiators and service disruptions for consumers.”

Current FCC rules give some “limited guidance” on what good faith means, Lake said. “But if we can provide greater certainty to the marketplace, that could help to guide the negotiating parties and reduce the number of failed deals and dropped signals.”

“If some of our broadcast rules are thought to interfere with market negotiations, we may want to look at those rules,” Lake added.

During the October dispute, Cablevision and others urged the FCC to order binding arbitration, Lake said. At the time, FCC Chairman Julius Genachowski (News - Alert) wrote to a letter to U.S. Senator Kerry – chairman of the Subcommittee on Communications, Technology, and the Internet – which said existing law does not give the FCC “the tools to prevent service disruptions, such as by ordering binding arbitration.” He added in the letter that Congress may want to revisit the law.

“The Media Bureau will prepare a notice that will take a broad look at what more we might do to advance the statutory objectives of allowing retrans fees to be set by market forces while protecting the interests of consumers,” Lake said.

News of the FCC action has led Kerry to make an announcement that he will not go forward with legislation given that the FCC is initiating rulemaking on the issue.

In a statement released this week, Kerry said, “I’m happy to hear that the FCC will initiate a rulemaking process to address the now all too frequent disruptions that consumers have experienced.  Today’s announcement recognizes that when disputes end in lost signals and dark television screens, no one wins.”

TMCnet reported that during the middle of the impasse between Cablevision and Fox, Cablevision claimed that News Corp (News - Alert)., which owns Fox, acted in “utter bad faith.”

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

Edited by Tammy Wolf