By Tony Romm - 03/19/10 06:53 PM EDT
The Federal Communications Commission announced Friday it would seek public comment on rules that essentially allowed Disney to darken millions of Cablevision viewers' channels before the Oscars last month.
The notice arrives at the beckoning of Time Warner, the American Cable Association, DISH network and DirecTV, as well as Public Knowledge, an industry interest group. Together, they are imploring the agency to "fix" regulations that determine how television stations like ABC, CBS and NBC negotiate how much providers must pay to carry their signals.
For the most part, Friday's announcement hardly provoked much surprise in the television community: The FCC had recently set its sight on retransmission rules, citing the lingering dispute between Cablevision and Disney in the New York TV market as evidence for possible reform.
Earlier this year, Disney demanded Cablevision pay significantly more money to carry its ABC signal. However, Cablevision fought the increase, which prompted Disney to darken its signal just hours before the Oscars aired.
The two sides have somewhat resolved their standoff, but the fiasco has nonetheless scared other cable providers, who felt they too might face channel blackouts if their yearly negotiations with television stations go sour. A handful of lawmakers, especially Sen. John Kerry (D-Mass.), have also demanded reform.
Together, they argue the rules reflect a time when the cable companies numbered so few that they had the upper hand in determining how much they would pay to carry a television station's feed. However, the surge in new cable companies in the past few years has now diminished their collective bargaining power.
Consequently, providers like Time Warner and Cablevision fear television stations will threaten to cut access to their channels
if they refuse to pay more for every customer who tunes in.
That puts the cable company in the precarious position of denying the rate increases and losing access to those channels, or accepting the hikes and subsequently raising consumers' monthly bills. Both options drive viewers to other cable providers and harm the market, opponents to current retransmission rules say.
The FCC will begin its formal review of that process next month. But it has already won early praise from Kerry, who said Friday that the comment period would "further educate both the commission and Congress on the practical alternatives to resolving these disputes."
"I look forward to engaging with the FCC to ensure the best interest of the public is protected as these companies hash out their private carriage negotiations," he said Friday in a statement.