Cable group wants U.S. FCC to end fee disputes

on March 09 2010 5:24 PM

A coalition of cable and satellite companies will this week call on the U.S. Federal Communications Commission to create a new process to resolve increasingly bitter disputes over carriage fees paid to broadcasters.

The group, which includes rival TV distributors such as Time Warner Cable Inc , DirecTV Group and Dish Network Corp serve more than 65 million U.S. homes. They will file a petition with the FCC, which argues the current retransmission consent regime is flawed.

The most recent dispute was when Walt Disney Co's ABC Network pulled its signals from New York's Cablevision Systems Corp on the eve of the Oscars. Time Warner Cable also had a public fight with News Corp's Fox network on New Year's eve.

The disputes are over how much TV distributors should pay for the right to carry the free-to-air broadcast signals of ABC, CBS, Fox and NBC.

The group, which also includes Cablevision and Mediacom Communications Corp , is led by Time Warner Cable. The No.2 U.S. cable operator said in a statement on Tuesday that the group wants the FCC to address skyrocketing consumer costs by establishing a new framework for resolving retransmission consent disputes.

Specifically, we plan to ask the FCC to consider arbitration and forcing continuation of carriage during a dispute, Time Warner Cable said in a statement.

In a letter to members of Congress, the cable companies said it was time to restore balance to the retransmission consent process and protect consumers from TV blackouts.

We respectfully urge you and other Members of Congress to carefully examine the circumstances that have resulted in the current imbalance in retransmission consent negotiations.

If the FCC were to agree to such a framework, it could weaken the negotiating stance of the broadcasters who have the right to switch off a signal at the end of a contract if they do not reach a new agreement with the distributor.

The increasing likelihood that broadcasters will pull their signals and leave customers with blank screens is a major concern for cable and satellite operators who have to bear the brunt of furious customer reaction.

While both the operators and broadcasters have launched aggressive PR campaigns to win over the public, most industry watchers believe cable companies will always have the harder task because they are being paid directly by the customers.

Most programing disputes are resolved at the last minute, although ABC's WABC New York went off Cablevision systems from midnight on Sunday morning till 12 minutes into Sunday night's Oscars' broadcast, which began at 8 pm.

While major cable, satellite and telephone company names have collaborated on this initiative, it is notable the No.1 U.S. cable company, Comcast Corp , is not part of the group. Comcast is currently going through a comprehensive regulatory approval process over its proposed merger with NBC Universal.

(Reporting by Yinka Adegoke; editing by Andre Grenon)

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