Kerry Proposes to Fix 'Broken' Retrans System

WASHINGTON: As the Cablevision-Fox retrans standoff continues, Sen. John Kerry (D-Mass.) this week announced that he would propose new legislation to protect consumers from losing broadcast TV signals during retransmission negotiations.

Over the weekend, Cablevision, which serves approximately 3 million subscribers in New York, Connecticut, New Jersey and Pennsylvania, dropped Fox channels WNYW (NY Channel 5), WWOR (NJ Channel 9) and WTXF (Philadelphia Channel 29), after the cable operator failed to reach agreement over retransmission fees with Fox owner News Corp.

Fox is airing the MLB National League and American League Championship Series, in which the Philadelphia Phillies and the New York Yankees are competing respectively.

In response, Kerry sent a draft of proposed legislation to FCC Chairman Julius Genachowski that would modify the FCC’s rules for retransmission consent negotiations with the goal of preventing cable providers from removing local broadcast signals during retrains negotiations, while allowing the FCC to determine whether both parties acted in good faith.

“There are important equities and business interests at stake in these negotiations, and in this most recent case, both sides believe they’ve negotiated in good faith,” the Senator said. “It’s not our job to take sides—but it is clearly our responsibility to ask whether there’s a better way forward as these kinds of situations rise in frequency.”

The proposed legislation would still allow the broadcaster to pull his signals “when there is a good faith impasse on terms,” the senator said, “but 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 offered several scenarios that would prompt FCC evaluation, but predicted that the most likely one would take place when the commission found both parties negotiated in good faith but had an “honest disagreement” on the value of the signal.

In that case, the senator suggested the FCC could request the two parties to submit to binding arbitration and if either or both refuse, the cable provider and broadcaster would be required to notify subscribers of potential loss of service, as well as publicize the terms of the deal, “so that consumers can judge for themselves who was making the fairest offer.”

The FCC also would have the option of requiring binding arbitration and fine both parties.

On Tuesday, the FCC chairman urged both parties to return to bargaining. “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 Genachowski. “The time for petty gamesmanship is over.” — TV Technology