Thursday, October 21, 2010

Is binding arbitration coming in cable retransmission deals?

As of today, Fox's local television stations and cable channels have been unavailable to Cablevision subscribers for five days. Dish Network's retransmission deal with Fox runs out at the end of October, and the Fox channels may go dark on Dish as well. Cablevision has offered to enter into binding arbitration, but Fox appears to be afraid that it won't get what it wants from arbitration.

It's looking more and more like the U.S. Congress or Federal Communications Commission may step in and impose rules for retransmission negotiations. One line of thought is that broadcasters would be prohibited from withdrawing their over-the-air programming from cable, satellite and IPTV service providers while negotiations are underway. Cable networks would be exempt from this rule, but the problem is that service providers could simply stretch out negotiations indefinitely.

Here's where I think this will go: Broadcasters will be required to supply their programming to service providers for a limited time after the expiration of a retransmission contract (perhaps 30 to 60 days) to allow the parties to negotiate a new deal themselves. After that, binding arbitration would be imposed. This would only apply to over-the-air programming--Fox would be free to pull down its cable networks as soon as its contracts expire, as would NBC Universal or Disney.

Any such rules would be tied up in court challenges, potentially for years, but as retransmission standoffs escalate and more service provider customers lose access to channels they want to watch, there's simply going to be too much pressure on the U.S. Government to ignore. 
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