The government has little ability to do anything about the continuing cable-fee dispute between Cablevision and the Fox network that now threatens to keep Cablevision customers from watching Major League Baseball's World Series.
The process to determine how much cable companies should pay broadcasters to carry their signal, formally known as retransmission-consent negotiations, is by and large the province of the private companies involved.
The FCC and several politicians have put pressure on the companies by admonishing them publicly and introducing legislation that would create a formal role for government intervention, but they are now without any enforcement tools to force a settlement.
"While federal law provides that the terms will be set by agreement between private companies, Fox and Cablevision share responsibility for protecting their audience's interests," FCC Chairman Julius Genachowski said in a statement issued on October 16. "I expect both companies to live up to this responsibility."
But beyond the action the commission has already taken, there may not be much incentive to do more.
When it comes to the cable-fee dispute, "the FCC is stuck between a rock and a hard place," said Jeffrey Silva, an industry analyst at Medley Global Advisors. "There is growing pressure for the commission to help bring the negotiations to an end, but a heavy hand is not politically palatable with the GOP railing against big government as we approach the midterm elections."
Meanwhile, Cablevision customers in the New York area have been without Fox programming for more than a week after the two companies failed to reach an agreement over how much Cablevision should pay Fox to carry its signal. According to Cablevision, Fox is asking for $150 million, more than twice the amount previously paid. Fox denies this figure, saying Cablevision is distributing false information.
If the spat is not resolved by Wednesday, Cablevision customers, who have been denied coverage of pro football games, won't be able to watch the World Series. The companies have not spoken to one another since last Thursday.
Citing a provision of the Communications Act that requires both parties to negotiate "in good faith," the FCC has requested that both parties submit information proving they have done so.
FCC Media Bureau Chief William Lake sent a letter to Fox and Cablevision last Friday asking them to "describe with specificity what has transpired" since the negotiations began and "detail the efforts" each company "is making to end the current impasse."
In its response to the FCC, filed with the agency today, Cablevision accused Fox of negotiating in bad faith.
"News Corp. [parent company of Fox] never engaged in real negotiations," Charles Schueler, Cablevision's executive vice president of communications, said in a statement. "They only made a 'take it or leave it' proposal for Fox 5, and they timed the Fox blackout to leverage major national sporting events to force Cablevision to accept unreasonable demands."
Cablevision is arguing that the FCC does have the authority to make Fox agree to binding arbitration.
Fox disputes these claims. "We have never made any 'take it or leave it' demands," Fox stated. "For Cablevision to still be making those claims is yet another example of their ploy to secure an advantage through government intervention."
In Fox's response to the FCC, the network declined to comment on whether Cablevision has been negotiating in good faith. Binding arbitration, Fox argued, is not an "effective path to the resolution of retransmission consent disputes."
But even if the agency finds that one or both companies did not negotiate in good faith, it can't force a settlement.
"The FCC doesn't have the authority to determine which side is right and what should be the financial terms of an eventual settlement," said Howard Waltzman, a former chief counsel of telecommunications and the Internet for the House Energy and Commerce Committee. "The commission's authority here is largely limited to fines."