Retrans Goes Online


Washington — Fox has introduced video streaming into the
retransmission-consent equation in a major way, making broadcasters
part of the debate over network neutrality in a manner that
they haven’t been before.

Broadcast lobbyists have been trying to keep the Federal Communications
Commission and Congress out of the retransmissionconsent
process, arguing that the current regime is a market place
negotiation that works just fine.

That could be a harder sell after last week, even if the retransmission-
consent fracas between Fox Networks and Cablevision Systems
is resolved and the programming is restored.

Fox took the dispute a step further, denying Cablevision subs access
to online versions of its programming for a brief time on Saturday,
Oct. 2. Fox declined to comment.

If you are giving Cablevision video subscribers access to Fox content
online, the broadcaster’s thinking went, then there is no motivation
for the Bethpage, N.Y.-based cable operator to negotiate a deal. It
was the same rationale behind Fox’s rejection of calls for independent
arbitration from the FCC and from some senators and representatives.

A source familiar with Fox’s online move said access was denied
for only a few hours and the only complaints came from Washington
policymakers, rather than from subscribers. Fox did not reinstate
those customers because of the pressure from D.C., the source said;
rather, it was because not all of Cablevision’s broadband customers
are also video customers, and Cablevision didn’t want to penalize its
non-video subscribers.

“The decision to withhold will certainly raise some eyebrows,
and it could make things even more interesting in the [Comcast-
NBC Universal merger] review,” Sanford Bernstein analyst Craig
Moffett said. “There’s obviously an unprecedented level of attention
being paid to online right now, and this just doesn’t look good.”

Cablevision highlighted the move in its on-screen message to customers
tuning in to dark Fox channels; the message called blocking
high-speed Internet customers’ access to content an “unprecedented
and anti-consumer action.”

Public-interest groups were quick to jump on the issue, as was network
neutrality proponent Rep. Ed Markey (D-Mass.), former head of
the House Communications Subcommittee and one of the authors of
the retransmission consent regime in the 1992 Cable Act. Also weighing
in were the American Cable Association and others pushing for
conditions on the Comcast-NBCU joint venture.

“Consumers should not have their access to Web content threatened
because a giant media company has a dispute over cable programming
carriage,” said Public Knowledge president Gigi Sohn, who agreed that
the move could have implications for the Comcast-NBCU deal. “The migration
of a programming dispute to the online world should also raise
red flags for the merger of Comcast and NBCU. If the combined Comcast
were to attempt such a maneuver, millions of consumers all over
the country would be hurt.” Comcast had no comment.

The FCC is already looking at the impact of access to online video,
according to follow-up data requests made to both Comcast and
NBC Universal.

“The tying of cable-TV subscription to access to Internet fare freely
available to other consumers is a very serious concern,” Markey said
in a letter to the FCC. “Consumers are losing their freedom to access
the Internet content of their choice.”