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What Happens If the FCC Prevents TV Fee Showdowns?

Cable providers and content creators are battling over fees and consumers are bearing the brunt of it.

Now the FCC is considering getting involved.

During today's Comcast-NBC Senate hearing, Chairman Julius Genachowski said, "This is an issue that should be looked at seriously." But if the FCC gets involved, forcing content companies to keep channels on the air through fee negotiations, what does that do to leverage?

Does this change the rules of capitalism?

There's no question that keeping channels on the air is only going to become a more pressing issue. Broadcast networks are increasingly demanding compensation for their local affiliates to create the dual revenue stream they get for cable channels. We could see a major showdown in August when Time Warner Cable and Disney's deal expires.

And we've seen that both sides are willing to stick to their guns, even if consumers pay the price. This past Sunday over three million Cablevision customers missed out on the first fifteen minutes of the Oscar broadcast because negotiations were stalled. Back in January Cablevision subscribers didn't have the popular HGTV and Food Network channelsfor a full three weeks because Cablevision was locked in negotiations with Scripps Networks Interactive over fees.

But if the broadcast networks can't threaten to pull channels when their contracts expire, what negotiating power do they have?

Another reason why maybe the FCC doesn't need to get involved: consumers have more choices of how they get their content than ever before. If a Cablevision subscriber isn't happy with the way ABC negotiations are affecting Oscar night plans, they can switch to Verizon's Fios as many did. Yes, switching television providers isn't quick or easy, but there are certainly plenty of choices, between satellite TV, a Telco provider like AT&T or Verizon, or all that free content online.

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Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.