Cablevision Offers Credits for MLB.com as FCC Staff Review Continues

In response to the MLB.com offer, a Fox spokesman pointed to a report by RBC Capital analyst David Bank that said it illustrates “the value of broadcast network programming.” Another analyst called Cablevision’s offer surprising because it promotes an online competitor to pay-TV offerings.

FCC staffers reviewing the continued blackout of three of News Corp.’s TV stations to Cablevision’s 3 million video subscribers are considering whether to require customer refunds for the outage, a person familiar with the matter said late Wednesday. It’s unclear whether Cablevision or Fox might have to pay such a refund because of their retransmission consent spat. No decision appears to have been made by career commission staffers reviewing Cablevision and Fox filings on whether each company negotiated in good faith (CD Oct 28 p3), and whether either side was dishonest and should be penalized, an agency official said. An FCC spokeswoman declined to comment on Cablevision’s MLB.com offer.

Of 285 Cablevision subscribers polled by stock analyst Richard Greenfield of BTIG, 28 percent blamed the cable operator for the blackout, 25 percent blamed Fox and 47 percent both companies. The survey wasn’t scientific and can’t be taken to represent what all Cablevision subscribers think, since respondents weren’t picked at random and instead replied to a survey Greenfield sent by e-mail. Cablevision’s rebate for using MLB.com amounts to the cable operator promoting over the top video from the Internet, Greenfield wrote. “One would never expect to see a cable company actively encouraging its consumers to watch live TV programming over the Web without the need for a multichannel video subscription."

Fox’s rejection of a new Cablevision retrans offer to pay what Time Warner Cable does for two of the three News Corp. stations blacked out -- Fox affiliates WNYW New York and WTXF Philadelphia -- was slammed by the American Cable Association. The offer was “extremely generous” and the shunning of it “is overwhelming evidence that Fox is determined to exploit a shattered retransmission consent regime,” said ACA President Matt Polka. “Fox’s saying that Cablevision’s choice is between overpriced programming bundles or even more overpriced a la carte TV station options is like asking a bank whether it prefers to be robbed during the day or night.” ACA is among those seeking changes to FCC retrans rules.

The retrans dispute should serve as a reminder that News Corp. didn’t, as required by the FCC, sell by December 2008 WWOR Secaucus, N.J., a MyNetworkTV affiliate also involved in the dispute with Cablevision, or The New York Post, said a group that opposes media consolidation and supports a retrans overhaul. “Fox’s licenses for its two New York market television stations expired on June 1, 2007, and have not been renewed, and have been vigorously opposed,” Media Access Project Senior Vice President Andrew Schwartzman wrote FCC Chairman Julius Genachowski on Thursday. Fox had no comment on the letter, which expressed similar concerns about the broadcast network’s New York TV duopoly as Cablevision did Monday. “Fox’s illegitimate TV duopoly unquestionably increases its leverage by allowing the bundling of the two stations’ retransmission rights,” the Media Access Project said, “especially in light of the fact that WWOR-TV is the weakest of the major stations in the New York market."

"Both sides are to blame” for the blackout, said Policy Counsel Corie Wright of Free Press. The FCC “needs to fix” the system of retrans, she said. “Transparency is critical to a functioning market, and the fact that neither side wants to discuss the industry’s cost structure shows how badly this market is broken.” The retrans dispute would enter its 14th day Friday.