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Time Warner Cable to ask FCC for new rules on negotiating programming deals

March 9, 2010 | 11:09 am

A group of distributors led by Time Warner Cable is going to file a petition with the Federal Communications Commission later this week, seeking new rules about how broadcasters and distributors can and cannot negotiate carriage deals.

"As we’ve been saying for some time, the FCC’s regulations governing retransmission consent, which were created nearly 20 years ago, are outdated and being exploited by broadcasters to harm consumers," said a Time Warner Cable spokeswoman.

The move comes in the wake of Walt Disney Co.'s decision to yank the signal of its New York television station, WABC, off Cablevision Systems on Sunday when the two sides were unable to reach a deal. Over 3 million homes in the New York City region lost the signal, which wasn't restored until 15 minutes into Sunday's Oscar telecast, when the two companies reached a deal.

Time Warner Cable and other distributors want the FCC to pass rules that would take away a broadcaster's ability to remove a signal during a carriage dispute. Instead, the distributors want an arbitration system put in place.

"The recurring threats of blackouts, high-stakes public “showdown” negotiations, and recent economic analyses have all confirmed what programming distributors have known for years: the retransmission consent regime is broken," the company said.

Other distributors participating with Time Warner in the request to the FCC include Cablevision Systems, Verizon and satellite broadcasters DirecTV and Dish Network, according to people familiar with the plans.

Not taking part in the filing is Comcast Corp., the nation's largest cable operator, which is in the process of trying to acquire control of NBC Universal, which owns lots of broadcast stations and the NBC network. In other words, Comcast has a conflict. Furthermore, with Comcast getting lots of heat about its pending NBC deal from lawmakers concerned about media concentration, the company wants to keep a low profile on this particular squabble.

The American Cable Assn., which represents smaller cable operators around the country, is also on board and wants the FCC to go even further in making some new laws. 

"The suggested remedies in the petition raise some of the ideas the FCC should consider," ACA President Matt Polka said in a statement, adding that as the process moves forward the association would like the regulatory agency to "address also the rampant price discrimination faced by smaller cable operators and their customers and the need for regulations to fix this problem as well."

Time Warner Cable, which went through a bitter negotiation with News Corp.'s Fox Broadcasting late last year, is facing its own battle with Disney over the ABC stations later this year. The FCC filing is seen as the first shot fired across the bow in negotiations.

There is some irony here. Time Warner Cable doesn't want broadcasters to be able to pull their signal during negotiations for a new contract. Yet, 10 years ago, it was Time Warner Cable that dropped the signal of Disney's ABC stations around the country when the two sides were unable to reach a new deal.

-- Joe Flint

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