FCC seeks comment on rules for TV-cable talks

March 19, 2010 7:32:58 PM PDT
Federal regulators are seeking public comment on a petition by cable, satellite and phone companies for new government rules that would give them more clout in negotiations with TV broadcasters over programming.

Friday's move by the Federal Communications Commission follows a series of disputes over the fees that cable companies pay broadcasters to transmit their signals. Broadcasters have begun demanding more for those signals as advertising revenue has weakened in recent years.

The most recent breakdown in negotiations caused Cablevision subscribers to miss the first 15 minutes of the Oscars when the ABC station in New York pulled its signal from the cable system. Other standoffs have pitted Time Warner Cable against News Corp.'s Fox stations, and Mediacom Communications Corp. against Sinclair Broadcasting Group.

A coalition of pay-TV providers - including Cablevision Systems Corp., Time Warner Cable Inc., DirecTV Inc., Dish Network Corp. and Verizon Communications Inc. - have seized on these incidents to ask the FCC to rewrite the rules governing so-called "retransmission consent" negotiations. They want the agency to prohibit broadcasters from interrupting signals during negotiations or before popular events, and to mandate binding arbitration in disputes.

Time Warner Cable welcomed the FCC's decision to study the issue.

"As broadcasters continue to demand more cash for carriage of their signals, consumers are the ones who are harmed - by paying higher rates or losing access to broadcast programming," Gail MacKinnon, executive vice president and chief government affairs officer for Time Warner Cable, said in a statement.

But Dennis Wharton, executive vice president of the National Association of Broadcasters, said the cable industry is exaggerating the extent of service disruptions that have resulted from fee disputes. He dismissed the petition as a bailout for "colossal cable companies."

Wharton added that "modest compensation from pay TV providers" is critical to sustaining the broadcast industry's business model.

Public comments on the petition must be filed with the FCC either electronically or by mail by May 4. It's too early to know whether the petition could result in new rules from the agency or when such rules could be adopted.