Last Friday, the head of the FCC told CBS(s cbs) and Time Warner Cable(s twc) that she would “consider appropriate action” if they didn’t end a fee dispute that has caused the popular channel to vanish from 3 million households. How’d that work out? Well, the blackout is about to enter its fourth week — and the only difference is that frustrated subscribers can now score a free antenna from Best Buy to receive CBS over the air.
Enough is enough. It’s time for the broadcast regulator to step in for real and put a stop to this. Doing so would not only let the good folks of New York, Dallas and Los Angeles get their “Under the Dome” and “60 Minutes” fix. It would also send a message to the TV industry to shop these blackout shenanigans which, in recent years, have become more and more common — from four in 2010 to 15 in 2011 to 22 in just the first half of 2012 alone, according to USA Today.
The blackouts themselves, recall, are the result of a breakdown in negotiations between the people who make TV — like CBS — and those who distribute it. When the two sides can’t agree on the price of a channel, the viewer gets stuck in the middle and shows vanish for days, weeks or months.
In the ordinary course of things, federal agencies shouldn’t take a hands-on role in setting prices in the private market. But, in the case of TV, the companies operate in a regulated environment that lets them rake in billions a year. It’s not unreasonable, then, for the FCC to step in to fix a regulated model that is clearly broken: the breakdown is evident not only in the growing number of blackouts, but in a system that force feeds customers unwanted bundles of channels at ever-higher prices.
Industry watchers have questioned whether the FCC can even get involved in the first place, noting that the negotiations turn on the broadcasters’ “consent” for retransmission. Sure, it can. As one expert notes, the FCC still possesses vast regulatory power and its the one that makes the rules for how cable companies and broadcasters negotiate in the first place.
At this point, it doesn’t matter which whether the cable company or the broadcaster is more wrong. There’s enough blame to go around: in this case, you can point to the scorched-earth tactics of Time Warner Cable’s lawyer or CBS’s insistence on selling its shows in bundles no one wants. A pox on both their houses.
Fortunately, this discussion will one day be irrelevant since consumers will buy their TV from the likes of Apple(s aapl), Aereo, Google(s goog) or some other over-the-top service. But for now, that era is still years away. In the meantime, the FCC should step in and do its job.