FCC Chairman tells Fox and Cablevision to stop taking shots and get to work
A high-ranking government official blasted News Corp.'s Fox Broadcasting and Cablevision Systems Corp. Tuesday for spending more time fighting with each other than trying to resolve a contract dispute that has left millions without access to popular sports and entertainment programming for four days.
"I am deeply troubled that Cablevision and Fox are spending more time attacking each other through ads and lobbyists than sitting down at the negotiating table," said Julius Genachowski, chairman of the Federal Communications Commission. "The time for petty gamesmanship is over."
The dispute is over fees Fox wants Cablevision Systems to pay to carry its New York TV stations WNYW and WWOR and its Philadelphia outlet WTXF on Cablevision's systems in New York, New Jersey and Connecticut that serve just over three million subscribers. Fox pulled its signals at midnight Friday and both sides have been aggressively cricizing each other through their various media platforms.
News Corp., which also owns the New York Post, has been running advertisements critical of Cablevision in its paper as well as on its television stations.
Cablevision, meanwhile, has used its systems to blast Fox and even ran an article in its newspaper Newsday, which serves Long Island, telling readers of alternative ways to watch Fox while the two sides work out their dispute. The story, published Tuesday under the headline “How to Watch Anyway: What You Need,” failed to mention Cablevision’s ownership of Newsday. It suggested that people buy a $25 “rabbit ears” HD antenna from Radio Shack and “make sure you also pick up a coaxial cable” to connect the television set to the antenna.
The newspaper, in an odd twist for a company whose business is built on paying customers, suggested that people could also turn to video streaming Internet sites to get their Fox fix. Many sites that carry TV content are illegal. “The quality of the streams isn’t always great, but if you have a solid Internet connection, the broadcast can border on HD-like quality,” the newspaper said. And there is always another option: “Go to a bar or a restaurant."
Both sides are being criticized by consumers. Fox also was attacked by consumer advocates when last Saturday it briefly blocked Cablevision subscribers access to some of its websites including Fox.com. The company quickly restored access after it was criticized by media watchdogs.
That behavior is "totally out of bounds in a dispute like this," said Gigi Sohn, president of Public Knowledge, a media advocacy group, on Saturday. "Consumers should not have their access to Web content threatened because a giant media company has a dispute over cable programming carriage."
While Fox's move didn't endear it to advocacy groups it was legal, according to Christopher Yoo, a professor of law at the University of Pennsylvania.
"People who own intellectual property have the right to decide who gets it and who doesn’t," Yoo said.
The FCC's Genachowski said he has called the CEOs of both Fox and Cablevision to remind them that "they shouldn't punish consumers because of their unwillingness to make a deal."
Both Fox and Cablevision are aggressively lobbying Capitol Hill. Fox wants Congress and the FCC to stay out of the dispute, while Cablevision wants government intervention or at least a forced arbitration to resolve thier differences.
The FCC does not have the regulatory clout to intercede in the dispute, but that may change. Sen. John F. Kerry (D-Mass.), chairman of the Senate Commerce Subcommittee on Communications, Technology and the Internet, delivered on his promise to introduce legislation that would try to limit channels being pulled during contract disputes.
Kerry wants to lengthen the process and give the FCC a role in determining whether both companies are negotiationg in good faith and whether a third-party arbitrator should be used. Although a programmer would still have the right to yank a channel from a distributor if no deal could be reached, "it would not be able to do so without much greater transparency in process and a more systemic effort at reaching agreement without consumers getting caught in the middle," Kerry said in a letter to Genachowski.
Fox's lobbyists are busy as well. A letter was making the rounds of the House Energy Commerce Comittee from representatives of the network arguing against any interference from Congress or the FCC.
"Please do not put the heavy thumb of the government on one side of the scale or the other.... There is no justification for government intervention," the letter said.
-- Joe Flint and Meg James
Photo: FCC Chairman Julius Genachowski. Credit: Gary Friedman/Los Angeles Times