ABC-Cablevision fight sets stage for more disputes, analysts say
The flap between ABC and Cablevision over retransmission rights may be resolved (or at least near a resolution), but analysts say that last weekend's showdown merely set the stage for similar disputes in coming months.
Talks between Time Warner Cable and Walt Disney Co. for retransmission rights are expected to start around Sept. 1 and there are hundreds of other such negotiations in the works this year. Analysts and legal experts say lawmakers may ask about retransmission consent and carriage rules at a hearing Thursday on Comcast’s proposed merger with NBC Universal.
Meanwhile, the basic business problems leading to these disputes over fees aren’t changing: Broadcasters are struggling with shrinking audiences and declining advertising, and the cable and satellite industries are resisting demands for higher fees to carry network channels.
That may encourage regulators and lawmakers to step into deadlocked negotiations between broadcasters and cable and satellite providers. And there may even be an appetite for broader reforms of the complex, and arguably outdated, rules on how broadcasters and paid television service operators negotiate compensation for carriage.
Under current law, cable and satellite companies must have retransmission consent to carry signals from local broadcasters. That gives broadcasters considerable leverage in negotiating for fees to carry their programs, analysts say. But broadcasters argue that they aren’t being fairly compensated for their valuable shows, and say that many cable, satellite and telecom service providers are carrying that programming while paying very little for it.
“We believe the spat will increase policymaker interest in reviewing the legal framework governing negotiations,” Rebecca Arbogast, head of tech policy research at Stifel Nicholas, wrote in a note. “We won’t expect enactment of new legislation or regulation in the near term, but we believe that could change at some point if other disputes result in viewing disruptions.”
She said that options for the Federal Communication Commission include gaining clear authority from Congress to stop broadcasters from pulling signals during an ongoing dispute over fees. The FCC also could be authorized the act an arbitrator in such disagreements.
Several lawmakers voiced their dismay with the ABC-Cablevision standoff. Sen. John F. Kerry (D-Mass.) urged the FCC to step in as a third-party arbitrator to help the parties work out a binding agreement. In a release Monday, Kerry said that “we must assess the roots of these broadcast disputes and ensure that the rules of the road promote resolution rather than public conflict that strips consumers of the services they rely on.”
March 9, 2010; 7:00 AM ET
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