Cablevision claims proof of bad faith by News Corporation


Both Cablevision and News Corporation’s Fox unit were required to submit their side of the story in their programming standoff to the FCC by Monday afternoon. Cablevision says it met the deadline and – as you would expect – says it is the aggrieved party.

Here is how Cablevision described its FCC filling:

“Cablevision Systems Corp. (NYSE: CVC) today filed a response to the Federal Communications Commission (FCC) documenting bad faith negotiations by News Corp. related to Cablevision’s continued carriage of Fox 5 and My9.  Cablevision urged the federal agency to assert its authority to immediately restore the broadcast stations and order the companies to submit to binding arbitration to reach a fair agreement and prevent a blackout of the World Series in New York.
Charles Schueler, Cablevision’s executive vice president of communications, said:
“The FCC filing clearly demonstrates that News Corp. has acted in bad faith and outlines the FCC’s authority to order binding arbitration and immediately end the Fox blackout of Cablevision customers.  News Corp. never engaged in real negotiations, they only made a “take it or leave it” proposal for Fox 5, and they timed the Fox blackout to leverage major national sporting events to force Cablevision to accept unreasonable demands.”
Cablevision’s filing with the FCC includes several key points:
[-] News Corp. has refused to negotiate in good faith by demanding a “take it or leave it” rate for Fox 5.  Further, News Corp. has claimed it cannot show any flexibility in its demands for Fox 5 because it is bound by “Most Favored Nation” (MFN) clause based on a rate it claims Time Warner Cable agreed to pay in a much broader, national agreement.  This is a self-imposed limitation that is a clear violation of the FCC’s good faith rules.
[-] News Corp. deliberately timed the deadline to black out Fox 5 and My9 to ensure that Cablevision customers would be denied access to major national sporting events including Major League Baseball playoffs and the World Series unless Cablevision accepted its “take it or leave it” demands.
[-] News Corp. has abused the power it has achieved through special “one of its kind” FCC waivers that allow it to own multiple government broadcast licenses and newspapers in the New York market.  News Corp. is attempting to leverage its unprecedented government-enabled media consolidation to force Cablevision to accept unreasonable fee demands.
[-] Cablevision has engaged in good faith negotiations and made numerous proposals – significantly increasing in value – since May in an effort to reach agreement, including four new proposals from Oct. 15 to 17.  Over the last year, Cablevision has reached agreements with every other major broadcast station in the market – NBC, ABC, CBS and Univision – and offered News Corp. more for Fox broadcast programming as it pays any of those stations.  But News Corp. is continuing to demand more for Fox 5 than Cablevision pays all of the other broadcast stations combined.
Cablevision already pays News Corp. more than $70 million a year for its channels, and News Corp. is demanding more than $150 million a year for the same exact programming. 
The Media Bureau of the FCC on Friday sent letters to Cablevision and News Corp. requiring both companies to respond today with information on how they were satisfying the good faith requirements of the Commission’s retransmission consent rules.  The letter asked for detailed accounts of the negotiations involving Fox 5 and My9 and the efforts by the companies to end the current impasse that has prevented Cablevision customers from receiving the stations since News Corp. pulled the signals at midnight on Friday, Oct. 15.
Cablevision is employing a variety of direct-to-consumer tactics to alert and inform customers on the current situation with News Corp.  Cablevision customers can urge News Corp. to return its programming and agree to binding arbitration by calling 1-877-NO-TV-TAX, visiting, joining its Facebook group “Cablevision Viewers Say: No New Fox Fees” or following on Twitter @No_New_Fox_Fees.”

Fox, as you would expect, says Cablevision is to blame for the impasse.
Both responses have been posted on the FCC website as pdf files.

Click here to read the letter from Cablevision.

Click here to read the letter from Fox.

RBR-TVBR observation: Kind of interesting that Cablevision is demanding that the FCC immediately issue an order which it has no authority to issue. That’s pretty unlikely to happen.