Analyst: Gov't Has Little Muscle in Cablevision/Fox Fight

Publish date:
Updated on

As Cablevision Systems' carriage battle with Fox Networks moves through its sixth day, media analyst Rich Greenfield added some needed perspective: despite the cries of outrage from several dozen legislators and regulators, the government has little power to change or enforce much of anything in this fight.
Fox pulled its broadcast stations WNYW and WWOR in New York and WTXF in Philadelphia and cable networks Fox Deportes, NatGeo Wild and Fox Business Network from Cablevision on Oct. 16 after it failed to reach a carriage agreement with the MSO.
The two sides were supposed to resume negotiations Thursday, but according to Fox neither side had spoken to the other as of 3:24 p.m.
In the meantime, more than 50 state, local and federal legislators have joined Cablevision's cry for binding arbitration to settle the dispute and even Federal Communication Commission chairman Julius Genachowski has asked the two sides to end the "gamesmanship," that has characterized the dispute.
In his blog post Greenfield notes that in reality, there is very little the government can do - and he points out correctly that Congress created the retransmission consent "mess" itself by its passage of the 1992 Cable Act. The only thing the FCC can do in these situations is to ensure that the parties are "negotiating in good faith." And even if it is determined that either side is negotiating in bad faith, the agency has no authority to take any action.
Now Cablevision isn't really asking for government intervention - its calls have been for Fox to agree, as it has, to submit to binding arbitration. But past retransmission consent battles between other broadcasters and other MSOs have included pleas for some kind of government reform. And it seems that Cablevision would not reject any moves by Congress to change retrans regulations.
And that could happen - earlier this week U.S. Sen. John Kerry (D-Mass.) introduced draft legislation that would update the 1992 Act as it relates to retrans - just don't expect it to happen soon, Greenfield wrote.
"With Congress currently out of session and a lame-duck session set to resume later this year (not to mention the potential impact of Republicans claiming a greater share of Congress this November), we would not rely on Congress to act any time soon to help Cablevision and the broader multichannel industry," Greenfield wrote.
Greenfield also seemed surprised that Cablevision did not take a simple action that he said could solve their retrans problems for the foreseeable future - handing out $30 digital TV antennas to its 3 million customers. Sure, it would cost Cablevision about $90 million for the equipment, but it would allow its customers to receive Fox programming and that of any other over-the-air station for free. For that one-time price, Cablevision or any other MSO could stop paying retransmission consent to any broadcaster, which would save it hundreds of millions of dollars over time.
Greenfield suspected that the main reasons Cablevision and other providers don't hand out antennas en masse are inconvenience - it's a bit of a hassle for customers to switch TV inputs -- it would restore lost ad revenue to the broadcaster and it hurts the cause for government intervention.
That last point could be the real reason behind the ongoing battle, according to Greenfield's blog post. The analyst sees little upside in this fight for the MSO - Fox isn't going to budge and probably can't because of "most favored nation" clauses in its other MSO contracts. Cablevision and its ruling Dolan family could simply be digging in its heels in an atempt to force broader legislative reform.
"While the Dolans are not normally known for ‘taking one for the team,' the only advantage we see to the current battle they are waging is to draw political attention in hopes that Congress at some point in the future decides to amend the 1992 Cable Act to diminish the current leverage held by broadcasters."
Fox declined to comment on Greenfield's post and Cablevision did not immediately return a request for comment.
In the meantime, Cablevision baseball fans will likely miss what could be the deciding game in Major League Baseball's National League Championship Series tonight at 8 p.m. (the San Francisco Giants lead the best-of-seven series three games to one).