As we enter day 5 of the standoff between Cablevision and News Corp. over the retransmission of local Fox stations, the controversy over a supposed net neutrality violation has died down, but pressure on the FCC to interfere with the parties’ negotiations is mounting. Sen. Kerry has also released a draft bill [PDF] that would reform the Cable Act’s retransmission consent rules to force TV stations to accept FCC mediation and allow carriage of their signals during a contract dispute.
It’s almost ironic that some would call for more FCC interference to solve a problem that is at least partly caused by FCC regulation. Cablevision is in New York, and what it wants is to carry Fox programming. The local Fox stations, owned and operated by News Corp., are demanding what Cablevision considers too high a price. So why wouldn’t Cablevision just turn to a Fox affiliate in Michigan for the content? The answer is that FCC regulations authorized by the Cable Act take that excellent bargaining chip away from video providers.
Randy May explains this in a great little primer on retransmission consent:
The FCC’s network non-duplication regulations allow local stations to block cable systems from importing network programming from another affiliate of the same broadcast network—even if the out-of-market broadcast affiliate and the cable network otherwise could reach a negotiated agreement. negotiated agreement. Similarly, syndicated exclusivity regulations allow local stations providing syndicated broadcast programming to prevent cable systems from carrying the same programs broadcast by out-of-market broadcast stations.
Without this prohibition, we may have already seen a resolution to the Cablevision-Fox dispute. So it’s amazing that the FCC is being called on to interfere in the negotiations when they already have a thumb on the scales.
The lesson of this latest confrontation should not be that we need to “reform” retransmission consent rules to add FCC arbitration as Sen. Kerry and some broadcasters and video distributors are suggesting. Instead, it’s that given a competitive market for programming, as the FCC has acknowledged exists in New York, we should plain and simply get rid of must-carry and retransmission consent rules altogether and allow a real free market to work. Without such a move, I see a lot more blackouts in the future.