Opinion: Should Washington rescue viewers when channels are blacked out on cable?
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Wednesday’s editorial about the standoff between Cablevision and News Corp. in Long Island focused on the Net neutrality implications of Fox.com briefly blocking Cablevision’s broadband customers. As a result, it offered no opinion about the efforts by some lawmakers to have the government intervene in such disputes -- for example, the new proposal by Sen. John Kerry (D-Mass.) to let regulators compel binding arbitration when broadcasters negotiate in bad faith.
I can’t speak for the editorial board on the latter issue, but my own view is that the government has better things to do than to insert itself between broadcasters and cable operators. If the parties want arbitrators to step in when they reach an impasse, they can write that into their contracts (assuming, of course, binding arbitration isn’t just something that corporations like to impose on their customers).
Cablevision executives have argued that News Corp. isn’t negotiating -- it has stuck with its initial demand to more than double the fees it receives for the rights to retransmit three local stations and three cable networks. That’s why Cablevision is eager to have binding arbitration to end the Fox blackout, an option that News Corp. has thus far rejected.
Implicit in Cablevision’s argument is that News Corp. has less to lose from the blackout than Cablevision does. Maybe so, but I think a long blackout would inflict real damage on both sides.
The obvious problem for Cablevision is that die-hard Fox watchers could switch to another pay-TV service (e.g., DirecTV). And for Fox, the blackout keeps the network’s program off of millions of TV sets in Long Island, which is bound to hurt advertising revenue. Given how much Fox paid for the right to televise the World Series this year, one might think it would be particularly eager to have those games displayed on as many sets as possible.
More subtly, the blackout encourages viewers to find alternatives to pay TV that aren’t as lucrative for Cablevision or Fox. Cablevision viewers who learn to watch ‘Glee’ on Hulu may soon figure out a way to watch Hulu and other online video outlets on their TV (hint: by connecting it to a laptop), making them ponder whether they really do need to pay $80 or $100 a month for television programming. That sort of switch is problematic for Fox too. Fox may collect ad revenue from Hulu, but not as much as it does from Cablevision -- not by a long shot. And it collects nothing at all from online bootleggers who stream Fox’s most popular programs.
People care deeply about their ability to watch TV, particularly when big events such as the World Series are on. That’s why the growing number of disputes like the one between Cablevision and News Corp. is catnip to politicians. Nevertheless, for the reasons stated above, I think there’s enough pressure on both sides to reach a compromise within a reasonable amount of time if they’re left to their own devices.
And if they don’t end the blackout before the World Series begins, that’s not so big a deal. The Yankees and Phillies are toast, so who on Long Island will want to tune in? Heh heh heh. Just kidding about the Phillies.
-- Jon Healey
