Will FCC enter cable dispute?

Kerry seeks solution to Disney-Cablevision negotiations

As the war of words between Disney and Cablevision escalates, Sen. John Kerry (D-Mass.) is stepping up pressure on the FCC to take steps to prevent broadcasters from pulling their stations from cable systems amid wrangling over retransmission consent negotiations.

Broadcasters are sure to fight any effort to give the FCC any kind of referee-type power in retrans negotiations. Disney and Cablevision have been in a public battle over retrans coin since Monday over Disney’s threat to yank WABC-TV New York from Cablevision system as of Sunday — the day of ABC’s live Oscarcast.

Cablevision has accused the Mouse of seeking $40 million a year for the right to carry the station, though Disney has privately disputed that $40 million figure. The Mouse House accuses Cablevision of refusing to budge after two years of negotiations, during which WABC-TV has issued monthly extensions of its previous retrans pact with the cabler that serves 3.1 million subscribers in New York, New Jersey and Connecticut.

Kerry, who is chairman of the Senate Commerce Subcommittee on Communications, Technology and the Internet, sent a letter Wednesday to Federal Communications Commission chairman Julius Genachowski pressing the commission to use its clout to “urge the parties to stay at the negotiating table and continue transmitting ABC programming to Cablevision consumers. I simply do not believe consumers should lose access to a signal over their cable service as long as both parties are negotiating in good faith,” he wrote.

Kerry proposed that the FCC establish a procedure wherein a station could file a claim of “bad faith negotiation” by a cable operator in a retrans dispute but could not pull its signal unless the commission determined that the cabler is acting in bad faith.

Kerry floated a similar proposal in late December when the Fox station group got into a bare-knuckle retrans brawl with Time Warner Cable over the New Year’s holiday that raised the specter of Fox stations going dark on Time Warner systems in nine major markets. Broadcast station execs have asserted that the FCC has no authority to regulate retrans negotiations.

The last thing station owners want is the feds getting involved in retrans just as station owners are poised to command real money from cable operators for the first time since the retransmission consent process became law in 1992. The Fox-Time Warner Cable deal set a new benchmark of about 40¢-80¢ per subscriber per month for retrans rights to Big Four network affiliate stations.

The FCC declined comment on Kerry’s proposal. The National Assn. of Broadcasters could not immediately be reached for comment late Wednesday.

U.S. Rep. Joe Barton (R-Texas), a member of the House Committee on Energy and Commerce, sent his own letter Wednesday to Genachowski urging the FCC to stay out of retrans negotiations, calling the alternative “a risky proposition.”

Cablevision issued a statement in support of Kerry’s move, asserting that “ABC Disney should not put viewers in the middle and instead work with us to reach agreement.” Talks between Cablevision and Disney execs have continued this week even after the dispute went nuclear on Monday evening when Disney issued a public warning to viewers that the station may get yanked.

Disney declined comment on the letters from Kerry and Barton.

As the pols weighed in, Cablevision and Disney continued to go at it Wednesday. In a lengthy recorded statement posted on its website, Cablevision asserted, “It is wrong for ABC to demand $40 million in new fees to help pay the salaries and bonuses for top ABC executives,” especially when the Mouse “makes most of (ABC’s) shows available for free on the Internet.”

Cablevision also charged that Disney is pushing “a ransom demand” because the company has taken a financial hit at its networks and theme parks.

WABC prexy-g.m. Rebecca Campbell responded by charging that Cablevision is ignoring the interests of its subscribers.

“The fact is that over and over again Cablevision picks fights with programmers, and it is Cablevision subscribers who suffer the loss,” Campbell said. “The inconvenient truth about Cablevision is that it pockets hundreds of millions of dollars in subscriber fees each year by carrying (WABC). Dropping our station would be the latest insult.”

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