Cable Co-Op Asks FCC for Help In Fox Sports Talks

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With its annual meeting about to kick off, the National Cable Television Cooperative last week went to federal regulators with a dispute involving the Fox’s regional sports networks.

The NCTC, whose Independent Show takes place this week in Chicago, is claiming it has reached an impasse as it seeks to negotiate a master carriage agreement for the sports services, part of Fox Cable Networks. The co-op has turned to the Federal Communications Commission for help.

LETTER TO MARTIN

The NCTC sent a four-page letter to FCC chairman Kevin Martin asking for enforcement of conditions — relating to small cable companies being able to designate “bargaining agents” — that were imposed on News Corp. in 2004 when it bought control of DirecTV Inc.

The American Cable Association, the lobbying group for independent cable operators, plans to support the NCTC with its request to the FCC, according to ACA president Matt Polka.

News Corp. owns the Fox sports services, which maintain the NCTC’s complaint is without merit.

NCTC president Jeff Abbas claims in his letter to Martin that Fox won’t let it review the existing contracts that some individual members, small and medium-sized independent cable operators, already have with various Fox regional sports networks.

While a number of the co-op’s members already have carriage deals for Fox sports channels, Abbas said some have asked the NCTC to negotiate a master affiliation agreement with Fox.

The NCTC cannot effectively negotiate a master contract on its members’ behalf without being able to review their existing agreements, including key terms and conditions such as license fees, according to Abbas. The current contracts NCTC members have include confidentiality clauses that bar such outside review.

The NCTC has been “rebuffed” when it’s asked Fox for assurances that the programmer won’t try to enforce the confidentiality provisions of the current or expired contracts that NCTC members have for the sports networks, the letter claims.

“NCTC cannot effectively represent companies in obtaining an agreement to renew or extend an existing News Corp.-affiliated RSN agreement if those companies put themselves at risk of a lawsuit [even one that is lacking in merit],” the letter said.

Fox officials claimed the NCTC’s charges to the FCC are groundless.

“We have always abided by the conditions the FCC adopted when it approved News Corp.’s acquisition of an interest in DirecTV, and we have done so in this situation,” said Tom Tyrer, Fox Networks Group senior vice president of communications and cross-platform operations.

“Over a year ago, in May 2005, we asked NCTC to provide us with information that is critical to our ability to proceed with any discussion,” Tyrer said. “We are still waiting for their answer. We regret that rather than responding so we can move our discussions forward, NCTC mischaracterized the facts to manufacture a meritless complaint with the FCC. Nonetheless, we remain ready to resume carriage discussions whenever NCTC is ready to do so.”

'ADDITIONAL CONSIDERATION’

Abbas said Fox has suggested it would consider easing up on the confidentiality provisions in exchange for “additional consideration” from NCTC members. Otherwise, Fox has said it will enforce those clauses as drafted.

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