The standoff between Yankees Entertainment & Sports Network and Cablevision Systems Corp. — already the subject of an antitrust suit — might be heading to Washington, D.C.
"We've been told that at least that one of the parties might be filing a complaint at the FCC. We've been alerted that it's at least a possibility at this point," said Kenneth Ferree, chief of the Federal Communications Commission's Media Bureau, the division mostly likely to take the first swing at a complaint.
Were a complaint to be filed, Ferree said, it would likely come under seldom-tested section 616 of federal communications law, which addresses restrictions on a cable operator's ability to seek an ownership interest in a programming network in exchange for a carriage agreement.
Without commenting on a possible FCC complaint, Cablevision president Tom Rutledge said his company was standing up to a programmer that was attempting to recover a large license fee from all subscribers, rather than just from the sports viewers most interested in YES's product, New York Yankees Major League Baseball games.
"It just can't be passed through without any restriction at all," Rutledge said. "Right now, the way the model works, there is no impediment to that unless an operator is willing to take the kind of heat we are.
"We lost some customers who are rabid fans. But it's been a small amount, a lot smaller than people predicted."
AT&T Broadband CEO William Schleyer said his company might be facing the same situation in Boston with MLB's Red Sox and New England Sports Network, which are commonly owned. He did not know when the next contract cycle begins.
"I would like to think that we do not have to go to Washington to solve this problem, because I think the solution might have unintended consequences," said Schleyer, who favors moving high-cost sports programming to à la carte status, if programmers agree.