The NFL and Major League Baseball are threatening to take their ball and go home if Aereo is allowed to continue streaming broadcast TV signals to subscribers without paying retransmission fees to broadcasters.
While CBS was winning its fights over distribution fees with Time Warner Cable it’s looking increasingly vulnerable in what used to be considered the core piece of its business: prime time programming.
The networks would rather continue selling rights to pay-TV providers on a market-by-market basis, as they do now, where they have most of the leverage, than risk facing a buyer with national market share.
It’s increasingly possible for consumers to cobble together the means to do much of what the Verizon-Comcast joint venture was said to be working on for themselves, using off-the-shelf hardware and software.
Despite broadcasters’ trumpeting of the free-market principles they say are at work in retransmission negotiations, the current retransmission consent regime is truly a creature of Congress.
Justice Department or Federal Trade Commission should treat the common practice of bundling low-rated networks like the Smithsonian Channel in with “must-carry” channels like CBS to achieve carriage fees and channel positions those low-rated networks would not command on their own as the illegal tying arrangement they clearly appear to be.
While CBS stations remain dark on Time Warner Cable systems due to their ongoing retransmission dispute,.actor Kevin Spacey offered as trenchant an analysis as you’ll come across of why CBS’ efforts to keep its content on a short distribution leash are misplaced.
In effect, CBS is treating TWC’s ISP business as simply another form of retransmission of CBS content, and demanding that the revenue the operator generates from that business be put on the table as part of the re-trans negotiations.
At the FCC’s open meeting today acting chairwoman Mignon Clyburn issued a vague threat of commission action to CBS and Time Warner Cable if they do not quickly resolve their retransmission consent dispute that has resulted in CBS stations going dark on TWC systems in New York, Los Angeles and Dallas.
“Quite frankly I am deeply disappointed that the parties seem to be unable to reach a retransmission agreement,” Clyburn said. “I am really distressed that consumers and viewers are being adversely affected and my primary concern remains with them. We will continue to urge both parties to stay and resolve in good faith this issue as soon as possible.”
She added she is “ready to consider appropriate action” if the blackout continues but did not specify what actions she would consider.
Clyburn’s warning came one day after the two sides were hauled before the New York City Council to testify about the dispute.
In truth, there’s not much the FCC can do to resolve the dispute in the short term. So long as both sides continue to negotiate in “good faith,” the commission lacks the authority to intervene. The two sides agreed to return to the bargaining table on Thursday following the hearing in New York.
According to a detailed, insider account of the negotiations in the Wall Street Journal, the dispute at this point has largely become a fight over digital rights to CBS shows, and it’s hard to see how CBS would not win that one. That makes it all the more puzzling that the network would risk over-playing its hand by blocking online access to its content by Time Warner Cable broadband subscribers — a move that seems almost perversely intended to irritate regulators.
At the time the FCC’s net neutrality rules were issued it hadn’t occurred to anyone that a network might actually block an ISP’s access to its own content but it’s a measure of how high the stakes have gotten in the retransmission game that CBS has taken that step.