Audio Video News

Following a bare-knuckled fight that interrupted ABC's Oscar telecast to millions of New York area cable subscribers, the major cable operators are petitioning the Federal Communications Commission for new regulations that would prevent future blackouts during retransmission negotiations.

Cablevision subscribers were aghast when ABC went dark on their system. The channel returned 15 minutes into the show, so viewers didn't miss much, but the interruption was enough to get people's attention.

Like many other increasingly ad-starved networks and cost-conscious cable systems, ABC and Cablevision were negotiating for the cable op to carry the network. Disney-owned ABC wanted more money, pointing out that Cablevision already pays $200 million a year for ESPN but nothing for ABC. Cablevision didn't want to cave in to demands, which presumably would set a precedent for future demands.

WABC, the New York ABC affiliate, wanted $40 million per year or $1 per viewer, similar to what Fox recently demanded from Time Warner in a similar fight. Cablevision made a counter-offer of 25 cents per viewer. The two reached an undisclosed agreement on Monday, but not before both sides used the media to issue urgent appeals to the public.

Now the urgent appeals are going to both the FCC and Congress, where Time Warner, Dish Network, Verizon, and other pay-TV operators are petitioning for rule changes that would prevent networks from blacking out channels during negotiations. So far the FCC has not responded but Sen. John Kerry (D-MA) is interested and has asked the commission to consider new rules.

Said Kerry: "Companies are going to fight over contracts. That's the market and there's nothing new and there's nothing wrong with that. But there's been an alarming increase in the number of times consumers are getting caught in the crossfire as collateral damage.... We need to fix the system."

Under existing "must carry" rules dating from 1992, cable operators are required to carry broadcast channels but the rules do not specify either payments for the retransmissions or rules for negotiations. The new rules might require mandatory arbitration or a tribunal of experts.

See The Wall Street Journal and The New York Times.