Cablevision, Fox continue war of words

Sen. Kerry promises action; can FCC step in?

As Sen. John Kerry (D-Mass.) stepped up his effort to overhaul the retransmission consent law, FCC chairman Julius Genachowski scolded Cablevision and Fox for publicly sparring while the blackout of Fox’s stations stretched into its fourth day.

“I am deeply troubled that Cablevision and Fox are spending more time attacking each other through ads and lobbyists than sitting down at the negotiating table. The time for petty gamesmanship is over,” Genachowski said Tuesday in a statement.

Cablevision and Fox execs broke off negotiations Monday with no additional face-to-face meetings set. The sides communicated in a short phone call on Tuesday and have another set for today. By multiple accounts, neither side is budging on its financial terms, on the table for weeks.

Meanwhile, the war of words continued apace. Adding to the heat in the nation’s largest media market is the fact that Cablevision and Fox parent News Corp. both own Gotham-area newspapers — Newsday for Cablevision and the Wall Street Journal and New York Post for News Corp. — that have been able to put their own spins on the source of the friction, if only through advertisements. (The New York Post so far has been surprisingly restrained in its coverage of the flap.)

Numerous lawmakers and others have called on the FCC in recent days to intervene in the contract dispute that knocked Fox’s WNYW and WWOR New York, and WTXF Philadelphia, off of Cablevision’s systems just after midnight Saturday. Cablevision has also pushed for arbitration in the dispute as a means to return Fox’s signals to its 3 million subscribers in the New York area.

Kerry, who is chair of the Senate Commerce Committee’s telecom subcommittee, is planning a hearing on his proposed retrans revamp for next month, possibly the week of Nov. 17. D.C. observers noted that the timing makes it nearly impossible for anything substantive to be done, with only a few weeks to go before Congress recesses for the holidays.

On Saturday, after Fox stations went dark, Kerry vowed to introduce legislation to mandate that retrans disputes be taken to a third party arbitrator and that signals cannot be pulled while negotiations are ongoing. He sent a copy of his draft legislation to Genachowski on Tuesday that spelled out numerous steps that would have to be taken before a broadcaster could pull its signal from a cable, satellite or telco provider during retrans negotiations. The draft includes a provision that would require broadcasters and subscription TV providers to publicly disclose the terms of their last best offers if one of the parties refused to engage in arbitration.

“The process we are trying to effect is two-party negotiations that have a big impact on an unrepresented third party; consumers,” Kerry wrote in a letter to Genachowski. “The goal is to offer a path to potential resolution of differences and protect consumers. It would stave off the termination of carriage on expiration of an agreement and allow signals to continue transmitting until the FCC evaluates the behavior of the parties and recommends or does not recommend binding arbitration during which carriage would continue.”

Naturally, broadcasters are poised to come out swinging at the Kerry bill — “We don’t have a broken system; we have a broken pay-TV company that likes to play Washington games,” said NAB exec veep Dennis Wharton — while the cable lobby naturally welcomed the effort.

The American Cable Assn., which reps smaller operators, “pledges to work with (Kerry) and all reform-minded members of Congress interested in developing a solution that alleviates consumer harm inflicted when monopoly broadcasters leverage wholly unjustified regulatory advantages,” said ACA prexy Matthew Polka.

Genachowski has so far declined comment on the growing calls for the FCC to play some kind of referee role; there are doubts as to whether the FCC has the legal authority to do so. Tuesday’s statement was the strongest statement Genachowski has made so far, but it still stops short of threatening official action.

“I have called the CEOs of both companies and reiterated the importance of reaching a deal. I reminded the companies that they share responsibility for consumer disruption, and that they shouldn’t punish consumers because of their unwillingness to reach a deal.” Genachowski said. “We will continue to scrutinize their actions very closely.”

As the blackout heads into its fifth day — costing Cablevision customers access to Fox coverage of baseball’s National League playoffs, among other programs — it has already gone on twice as long as the last major retrans blowup, when ABC stations in May 2000 went dark on Time Warner Cable systems for nearly 48 hours.

Cablevision held fast to its call for arbitration as the solution to the standoff.

Fox issued a statement that offered an example of Cablevision management’s recent rejection, in an FCC filing, of arbitration as a remedy for its ongoing carriage battle with satcaster Dish Network over carriage of Gotham-area sports cabler MSG Network. It went dark on Dish Network on Oct. 1. (MSG Network is part of Madison Square Garden Inc., which Cablevision spun off as a separate company earlier this year.)

“The startling hypocrisy of Cablevision’s position — demanding one set of rules for itself, the exact opposite set of rules for Fox — proves that it will say and do anything to protect its profits,” Fox said in a statement.

(Fox is in the midst of its own carriage battle with Dish Network over FX and 19 regional sports cablers, which went dark on Oct. 15. It’s also facing an Oct. 31 retrans deadline with Dish for its 27 broadcast stations.)

A day of dueling statements wrapped Tuesday with MSG Network denying that it was opposed to arbitration, followed by a three-sentence Fox missive blasting MSG’s “hypocritical claim.”

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