News Analysis
DIRECTV Vs. Fox: A Simple
Solution
By Swanni
Washington, D.C. (October 23,
2011) -- Here we go again. A
multi-billion dollar programming company tells a multi-billion
dollar TV provider that it will have to pay more to carry its
channels.
Of course, the TV provider initially says no way, claiming the
fee hike will force its customers to pay more in monthly
programming bills. Then the programmer expresses outrage, saying
the TV provider doesn't care enough about its subscribers to
give them the channels they want.
In this latest case of tit for tat, we have Fox and DIRECTV who
are fighting over the satcaster's right to carry roughly 20-25
Fox cable networks. (See:
DIRECTV Could Lose 20 Fox Channels
for more details.)
But we have seen this scenario before -- in fact, dozens of
times in the last few years. In some battles, the two sides
reach a last-minute compromise to ensure that viewers don't lose
their favorite channels. But in others, the two sides take
weeks, maybe months, to reach a deal, leaving viewers staring at
blank screens while two giant corporations battle it out.
It's pathetic; it's phony; and it's preventable.
Yes, preventable.
Rather than DIRECTV and Fox begin spending hundreds of thousands
of dollars on slick advertising campaigns designed to influence
public opinion on who's wrong in this dispute, the two
sides should embrace a simple, inexpensive and fast way to end
this battle without hurting the consumer.
And all future programming battles.
They should ask the
FCC to establish a 'baseball-style' arbitration process for
program fee disputes.
It's not a novel concept -- I've urged the industry and federal
officials to approve it many times in the past -- but in today's
bleak economic environment, it's needed more than ever.
Programmers should get a fair price for their channels but TV
providers shouldn't have to pay at gun point, either, which can
lead to higher monthly fees for recession-weary viewers.
Fox and DIRECTV carry so much weight in Washington, I think it
could actually get done this time if the two companies would
just put down the gloves and jointly ask for arbitration in
their case -- and in all future programming disputes.
And here's how it would work:
The FCC would force TV
programmers and TV providers to enter arbitration if they can
not reach an agreement one week prior to the end of a carriage
agreement. (In the Fox-DIRECTV dispute, that would be now;
the two sides have set a Nov. 1 deadline to sign a new deal.)
The arbitrator would determine how much the TV provider should
pay for the programmer's channel (s) after hearing arguments
from both sides. And the channels would stay on the air until
the arbitrator's decision is handed down.
Now some programmers in the past have balked at arbitration
because they believe it hurts their leverage if they can't take
their channels off the air during negotiations. But in this
case, Fox has said publicly that it's offered DIRECTV an
extension that would allow FX, the Fox Movie Channel and 20
other Fox cable networks to stay on the air while talks
continue. (DIRECTV has rejected the extension offer.) So Fox
shouldn't have a problem with arbitration, at least on this
point.
DIRECTV shouldn't have a problem with it, either, because it
says it wants to ensure that Fox doesn't charge it more than the
fair market value. An arbitrator could certainly make that
happen.
So, DIRECTV and Fox, man up. Ask the FCC for a baseball-style
arbitration. It will be good for you -- and good for all of us
in the years to come.
