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Pressure mounts for FCC to intervene in retransmission disputes

While there are doubts about how much authority the FCC has in retransmission disputes, pressure is mounting, and the commission must take action to end the toll it's taken on subscribers.

FCC Commissioner Michael Copps said last week that current legislation preventing the commission from intervening in retransmission fees negotiations is outdated. But, he added, as an agency that is supposed to serve the public interest, the FCC may have the authority to intervene in negotiation stalemates like the one that resulted in the loss of FOX programming for more than 3 million Cablevision customers in New York, New Jersey, Connecticut and Pennsylvania.

“If the FOX-Cablevision dispute proves anything, it is that consumers are clearly not being protected,” Copps said in a statement. “I believe the commission should take a very serious look at whether ‘good faith’ negotiations are indeed occurring. What, indeed, does ‘good faith’ mean in the dog-eat-dog world of big media? If such talks are not taking place, we should move promptly to protect consumers.”

Copps’ comments come after FCC Chairman Julius Genachowski's criticism of both parties' lobbying war and inability to come to an agreement. Sen. John Kerry, D-MA, has also issued a draft of legislation that would grant the FCC clear authority to mediate negotiations and force broadcasters to keep running their channels during contract disputes.

However, several analysts said direct intervention would face fierce opposition and probably a court challenge.

“Any attempt by the FCC to require News Corp. [FOX's owner] to restore signals to Cablevision would face a better-than-even chance of being reversed in court. It would also set a precedent of intervention that the FCC probably wishes to avoid,” Paul Gallant, an investment analyst at Concept Capital, said in a research note. “And as we have noted previously, should the FCC pursue a rulemaking to revise the retransmission rules on an industry-wide basis, we believe that too would face a tough court fight.”