The FCC announced on Wednesday it would consider taking a bigger role in ensuring disputes between TV broadcasters and cable distributors don’t result in blackouts. While granting the FCC more power to reign in negotiation breakdowns would be a welcome change in today’s contentious retrans landscape, it could also come much too late to be effective.
In a speech at the Media Institute, FCC Media Chief William Lake lamented the current state (PDF) of retrans negotiations:
“We all know the nub of what has happened. The broadcasters see their ad revenues down and see the allure of a dual revenue stream. And the distributors feel stress on the amounts they have planned to pay for programming. The cash demands of broadcasters are rising faster than the distributors’ willingness to pay, and the result has been a growing number of cliffhanger negotiations –- and some that have fallen off the cliff.”
The number of negotiations that have “fallen off a cliff” continues to rise, as there have been more blackouts over the past year than ever before. One of those negotiations was the recent spat between Cablevision (s CVC) and Fox, (s NWS) which resulted in a 15-day blackout of Fox broadcasts in Cablevision’s cable systems, including two games of the World Series.
During that dispute, the FCC was left hamstrung by an inability to force the two sides to the negotiating table. The best it could do was try to ensure Cablevision and Fox were both “negotiating in good faith.” But “good faith” is a pretty nebulous concept — and frankly, not very enforceable.
Now the FCC, hoping to ensure that these types of disputes don’t continue, announced that it will issue a Notice of Proposed Rulemaking to examine what its future role in retrans negotiations should be. Giving the commission more enforcement power to make sure networks and cable companies will keep programming on the air during these disputes will be a positive for consumers, but it’s also something that is at least 18 months, if not several years, away.
Government legislation had the potential to solve the problem more quickly, but in the wake of the FCC’s announcement, Sen. John Kerry (D-Mass.) said that he was dropping his plans to push a bill on retrans reform through Congress. But Kerry, who was one of the key forces behind the Telecom Act of 1996, knows how slowly the FCC can act in situations like these.
Instead, the FCC’s rule proposal will take at least a year to finish, followed by several months seeking comment, followed by the potential for parties to contest the commission’s new rules in court. By the time the process is finished, consumers can expect to see several more contentious negotiations end in blackouts.
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