Fox/Cablevision dispute remains unresolved


The American Television Alliance, a group consisting of MVPDs and consumer groups, is asking the FCC to get involved in the dispute over retransmission fees between Fox/News Corp. and Cablevision. But many question whether the FCC has the power to do much.

Both FCC Chairman Julius Genachowski and senior Democratic Commissioner Michael Copps have almost said as much in recent comments. Genachowski has been limited to talking to each company’s CEO and publicly criticizing them, and Copps acknowledged that the FCC has very limited authority, and has been reluctant to use what little it has.

An analyst quoted by the Washington Post said that anything the FCC does try to do would likely face problems in the court. Concept Capital’s Paul Gallant added, “It would also set a precedent of intervention that the FCC probably wishes to avoid. And as we have noted previously, should the FCC pursue a rulemaking to revise the retrans rules on an industry-wide basis, we believe that too would face a tough court fight.”

Others are speculating that Fox is likely to remain entrenched, viewing Cablevision as a test case in how far it can push negotiations for higher compensation. The thinking is that it’s better for Fox to play hardball with Cablevision’s relatively compact 3M subscriber universe than to try to go toe-to-toe with Comcast.

As for ATVA, it’s fully prepared to hide behind subscribers, saying it’s their interest it is trying to protect. It wants the FCC to immediately move forward on a proceeding to reform retransmission rules.

In a blog post, Los Angeles Times’ Jay Healey thinks that both companies have quite a bit to lose, and believes that will help drive a resolution to the impasse sooner rather than later. Cablevision in particular risks losing subscribers to other MVPDs, and Fox risks losing cable viewers to the internet, where its compensation package is considerably less lucrative than it is with the cable company. Besides that, both risk losing a huge chunk of potential MLB World Series viewers.

Healey thinks the government should stay out of it, concluding, “I think there’s enough pressure on both sides to reach a compromise within a reasonable amount of time if they’re left to their own devices.”