Fox and Cablevision declare truce

02 November 2010

NEW YORK: Fox and Cablevision have reached an agreement to restore programming to more than three million New York-area subscribers in time for the baseball World Series.

Although the two parties wouldn't disclose details of their truce, it is understood that the dispute followed renewal demands by Fox for $150 million, (€107m; £94m) more than double the value of its previous contract with the cable firm.

US viewers have been faced with a record number of television blackouts this year as a result of such contract disputes.

The news will be welcomed by US advertisers, as World Series games traditionally gain some of the highest viewer ratings of the year.

Originally, the dispute began after Fox parent News Corp asked Cablevision to pay higher re-transmission fees for its local Fox affiliates, arguing that the provider should pay for its programs even though they are available for free on the airwaves.

Cablevision strongly disagreed, and demanded stronger intervention by government.

The Federal Communications Commission (FCC) ordered the two sides to negotiate directly, but refrained from directly intervening in the talks.

While the two parties say they've reached a new agreement "in principle," Cablevision has since said it had agreed to pay "an unfair price" for Fox's local stations, adding that it "conceded because it does not think its customers should any longer be denied the Fox programs they wish to see."

While commentators here believe that Fox was the winner this time around, the bitter dispute over transmission fees is unlikely to end.

Senator John Kerry believes that the dispute serves to highlight just how bad the battles between broadcasters and paid television distributors have become and claims that the law as it stands appears to favour broadcasters.

He said: "What I know is that this system is broken, and I think we're all better off if we have a dialogue about systemic reform and modernizing the law rather than just jumping into the fray and getting involved in each conflict in isolation."

But the FCC said that its hands were tied.

"Under the present system, the FCC has very few tools with which to protect consumers' interests ... Current law does not give the agency the tools necessary to prevent service disruptions," it said.

Meanwhile, the public advocacy group, Public Knowledge, has criticized the FCC for its inaction.

It argued that any legal questions over the Commission's authority to intervene in transmission disputes is overshadowed by its job of protecting consumers who lose access to TV programming during contract disputes.

Public Knowledge spokesman Art Brodsky said that as long ago as last March, the FCC had considered a rethink on its role in such disputes but it had signally failed to act.

"Consumers shouldn't have been held hostage while the discussions went on," he added.

Data sourced from Washington Post; additional content by Warc staff