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One reason Fox is reluctant to arbitrate its contract dispute with Cablevision

In its standoff with Cablevision Systems Corp. over a new deal for the cable operator to carry its local TV stations in New York and Philadelphia, News Corp.'s Fox has steadfastly refused to go the arbitration route.

While Cablevision is pushing for arbitration, Fox argues that the two companies should be able to strike a new deal on their own without a third-party mediator. Fox also has been busy lobbying Capitol Hill to stay out of the spat. Several congressman and senators are arguing that the two should go into arbitration and that the Federal Communications Commission should step in. The FCC, which is trying to stay out of the fight, has also advocated that the two go to a third party if they can't come to terms.

Fox certainly is worried about setting a precedent by bringing in an arbitrator, but more importantly, it doesn't want to risk having to rewrite deals it has with other distributors -- particularly Time Warner Cable, the nation's second-largest cable operator, with 14.5 million subscribers. Earlier this year, Fox wrapped up a long-term deal with Time Warner Cable which, according to people familiar with the pact, includes a most-favored-nations clause.

In other words, if Fox goes into arbitration and the rate set is lower than what Time Warner Cable is paying, Fox would likely have to adjust that deal. This is why Fox is offering Cablevision the same deal it is offering Time Warner Cable.

Cablevision had a chance to do a deal with Fox last year but instead pushed for an extension of one year. The company, people inside Fox say, was asked by Cablevision to complete its big deals with other distributors such as Time Warner Cable and then come back to Cablevision. Now apparently Cablevision thinks it has found the way to try to pressure Fox in cutting it a better deal.

So far, Fox has resisted the push for arbitration. But just as Cablevision will start to hear from Yankee fans if the Bronx Bombers make the World Series and some 3 million New Yorkers can't watch the game, Fox will get more pressure from the government for resisting arbitration the longer this drags on. Cablevision has shown in the past that it is willing to play the waiting game. It once kept the Yankees' YES Network off its systems for a whole baseball season. Fox, particularly its New York stations WNYW and WWOR, may not be able to afford that much patience.

-- Joe Flint




Comments () | Archives (5)

I get why people would get pissy about losing their Fox cable channels, but especially for the NY-metro Cablevision subscribers I don't understand why they just don't unplug from the cable and grab a digital antenna to watch Fox 11 in New York? I lived without cable on Long Island for the first 20 years of my life and never had a problem getting what was at the time the WNEW signal.

The FCC should mandate that all cable company's carry the local stations all the time with no interuptions( in NYC case 2,4,5,7,9,11) at a predetermined not to exceed rate set by the FCC for that area.

Also its time the cable companies started to compete for your business, just like telco and utility companies. The infrastructure is in and it's bought and paid for......How about some competition so I don't have to use the thieves from Cablevision.

Joe, first it's Fox 5 and second, not everyone in the NY area can get on-air channels with an antenna, or has a digital antenna. And if they want to keep their cable for non-broadcast channels, switching between cable and antenna is a major pain, probably beyond the ability of most people.

And there is competition, it's called Verizon FiOS. I have it and it's great. Not everyone can get it, unfortunately.

Most people that are holding Cablevision responsible for this dilemma don't realize that the outcome will affect all of you in the future no matter what provider you have. The deal that is made with Cablevision will set a new high water mark that will be used by Media Mogul (and benefactor of several FCC exceptions to the law) Rupert Murdaugh. It's easy to say "pay it and give my Glee, Simpsons or World Series back" but the more Cablevision has to pay Rupert the more your bill will have to rise to cover the increase. Before you say "I'm canceling Cablevision and going to Verizon or DirecTV (notice I haven’t mentioned Dish Network because their 14 million subscribers have been without 14 Fox channels since Oct. 1 and will loose the entire Fox and My9 line-up by Nov. 1 if a deal isn’t struck) just realize that their turn in the barrel is yet to come. There's no hiding from the ramifications that the results of this battle will cause and ultimately you won't be able to avoid them. What happens with these two “negotiations” will spill over to all providers in a very short time. Everybody complains about the cost of television service but when the main factor of that cost is at stake, your interest would be best served to be against Media giants that have been granted special treatment for use of YOUR Federally owned airwaves and give their signal for free the right to charge you obscene prices to see their programming over Cable or Dish.
Be smart, toughen up and stand up against TV Blackmail!

Here's a way to get EVERY post-season play-off game AND the World Series for only $9.95!!

The FCC does nothing to keep the cable industry safe,and neither does any cable broadcasting company.Everyone is too busy worrying about money instead of whats important,bullying on the internet,sexual stalkers,computer terror attacks,and so on.Since most internet feed is thru the cable company's,they should have internet security.The FBI doesn't have the experience to do it,Who does??


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