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FCC Can Win a Supporting Role Nod on Broadcast TV Fees

By / 3.11.2010

So I wasn’t the only one who thought the FCC dropped the ball in its dealing with the carriage fee kerfuffle over the weekend—some of the nation’s largest cable and broadcast companies have sent a letter to the FCC to that effect.

In a petition filed with the FCC, Time Warner Cable, Verizon Communications, Cablevision and advocacy group Public Knowledge said that regulations governing transmissions from broadcasters to subscription-television providers are outdated and warned that last weekend’s standoff between Cablevision and Walt Disney Co. will be repeated unless the FCC issues new rules. They also called on regulators to assign an arbitrator during stalled negotiations and to require broadcasters to maintain their signals if talks break down.

Updating technology and media legislation is a perennial issue in an era where rules are oftentimes obsolete as soon as they’re spelled out. But it’s rare that you see industry players go to the government and ask to be regulated further. In this case, the FCC should take them up on the offer.

The most immediate benefits will come from the willingness of both broadcasters and cable companies to submit to arbitration, and the signal maintenance requirement. The debate between broadcasters and cable companies is broadly not one of principle, but of money. This negotiation lends itself readily to arbitration, as both sides are not facing an all-or-nothing choice, but seeking a middle ground is reached on fee pricing. Arbitration means that they will find that middle ground faster.

In the off chance that they can’t find that middle ground in time for a “major television event” (whether it be the Oscars, a bowl game, or the 24 season finale), the signal maintenance requirement means that consumers wouldn’t be the loser if talks broke down. Agreeing to extend exiting contracts an additional couple of days is much less costly to either party than the damage done by angering customers in a fiasco like last Sunday’s Oscar-fest.

The FCC should take this opportunity to work with industry—and not impose a solution on them—on a negotiation framework that will be as big a hit with consumers than Sandra Bullock’s role in The Blind Side was with the Academy of Motion Picture Arts & Sciences.