Brain Stetler and Bill Carter
New York Times
October 24, 2010

The News Corporation’s Fox and local stations in the New York metropolitan area have been blacked out for more than a week in the three million homes served by Cablevision. The negotiators have dug in their heels; the two sides have not spoken to each other since Thursday afternoon.

More than just the tens of millions of dollars in payments that Cablevision makes to the News Corporation are at stake. The dispute is also about the government’s role in the battles over Americans’ access to television channels — battles that seem to be happening more often as stations envision higher fees as a substitute for declining advertising revenue. A long blackout increases the pressure on local and federal lawmakers alike.

But both companies feel that the fight is worthwhile. Cablevision says it wants the government to intervene, while the News Corporation aims to hold out for the price it believes it deserves for its popular TV shows.

With Fox set to broadcast the World Series starting on Wednesday night, a huge lever for the network, the News Corporation’s advice to Cablevision customers who do not want to switch service providers can be boiled down to three words: buy an antenna.

There is one deadline looming before then. The Federal Communications Commission has given the two companies until the close of business on Monday to provide evidence of “good faith negotiations,” which is required by law in disputes over what is known as retransmission consent, or contracts that allow cable systems to carry programming of local stations.

If the F.C.C. concludes that the lack of progress is a result of a refusal of one side or both to bargain in good faith, the agency could impose a fine or explore other options to reach a resolution.

Cablevision executives say privately that they believe the F.C.C. has the authority to require the News Corporation to put its stations back onto the cable system, if the agency finds that negotiations have not been conducted in good faith.

But the F.C.C. has not asserted it has that authority, and it has been reluctant to intervene in other retransmission feuds.

Another Fox station blackout is possible at the end of the month if the News Corporation cannot come to a deal with the Dish Network, a satellite service. Distributors like Cablevision and Dish have been calling for legislative remedies for what they say is a broken retransmission process, one that gives too much power to the broadcasters.

Wall Street analysts agree that Cablevision may benefit if regulators or legislators become involved. “That may be what Cablevision is playing for,” Craig Moffett, an analyst at Sanford C. Bernstein & Company, wrote in a note to clients this month.

Cablevision has been joined by almost three dozen other cable and satellite distributors in a trade group, the American Television Association, that is pushing for an overhaul of retransmission rules.

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