Genachowski Urges Fox, Cablevision to End Carriage Dispute

FCC Chairman Julius Genachowski urged CEOs of Fox and Cablevision to end their retransmission consent dispute, he said, saying he spoke to officials at both companies by phone Tuesday. “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. I also insisted that they negotiate in good faith,” Genachowski said in a statement e-mailed to reporters.

Genachowski also said he was “deeply troubled” that the companies have spent more time attacking each other through lobbyists and ads than in negotiations. “The time for petty gamesmanship is over.” Meanwhile, Sen. John Kerry, D-Mass., sent Genachowski a copy of a draft bill that would implement many of the changes some pay-TV distributors want made to the retransmission consent rules.

Genachowski’s statement and actions appear to be a reaction to pressure from Congress, a cable attorney said. Beyond the Kerry draft bill, New Jersey Sens. Frank Lautenberg and Robert Menendez, both Democrats, asked the FCC to quickly step into action this week. Genachowski’s statement Tuesday is more of a political statement than barometer for where the commission stands on changing the retransmission consent rules, the lawyer said. “If the commission wanted to do something they would have done it already,” the lawyer said. “And they've had vehicles to do so. They've just decided not to."

Fox and Cablevision again failed to make progress toward ending the carriage dispute that has deprived some 3 million New York and New Jersey-area cable subscribers of Fox programming, Fox said Tuesday afternoon. The companies spoke briefly by phone Tuesday and agreed to continue discussions Wednesday, Fox said. The broadcaster also highlighted Cablevision’s “hypocrisy” in calling for government intervention and arbitration in this case as its one-time corporate sibling Madison Square Garden Inc. has fought off similar calls by Dish Network in a carriage dispute over its regional sports networks in New York. Cablevision defended its position. “By now it should be clear even to [Fox owner] News Corp. that binding arbitration is the fastest and fairest way to return Fox programming to our customers,” a Cablevision spokesman said.

The NAB said the retransmission consent system has only broken down because one party is looking for government intervention, rather than devoting its full attention to reaching a negotiated agreement. “We don’t have a broken system; we have a broken pay-TV company that likes to play Washington games,” an NAB spokesman said. Fox has an added incentive take a tough line against Cablevision because its retransmission consent agreements with Dish Network expire at month’s end, said Gimme Credit analyst Shelly Lombard. A higher rate from Cablevision could “set the tone” for a bigger contract from Dish, she said.