FCC targets blocking bycable firms

By Todd Shields
Thursday, December 9, 2010

U.S. regulators will propose rules to protect television viewers from being blocked from channels during fee disputes like the fight in October that blacked out Fox programming for 3 million cable viewers, an official said.

The Federal Communications Commission will begin an inquiry into regulations early next year, William Lake, chief of the agency's media bureau, said in a speech Wednesday in Washington.

"A principal concern is to protect consumers when talks break down," Lake said.

Cablevision Systems asked the FCC to intervene in October when Fox pulled programming in the New York and Philadelphia areas after Cablevision refused to pay a fee for it. The two-week standoff ended Oct. 31 as the sides agreed to terms they did not disclose.

Throughout the industry, broadcasters are asking cable and satellite companies to pay for content that was previously free, igniting disputes. Pay-TV providers such as Cablevision have balked at the fees, arguing that the channels are free over the public airwaves and on the Internet.

Pay-TV operators typically pass the fees on to consumers as higher rates, a practice the companies are finding is becoming harder because of a sluggish economy.

Disputes over the charges have caused seven blackouts of cable and broadcast channels this year, affecting about 19 million pay-TV subscribers, according to data compiled by Bloomberg.

Chairman Julius Genachowski has concluded that the FCC has limited power to prevent program blackouts, Lake said. He said the agency "will take a broad look at what more we might do" with "our current authority."

Time Warner Cable, Cablevision, and pay-TV providers Dish Network, DirecTV and Verizon Communications want regulations that constrain broadcasters' leverage, analysts for Stifel Nicolaus & Co., said last month.

- Bloomberg News

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