Carriage dispute
[1] While most carriage disputes are resolved without controversy or notice,[2] others have involved programming blackouts, both threatened and real, as well as strident public relations campaigns.
[5] In the 1950s, cable companies operating in the western United States began retransmitting broadcast signals for the benefit of customers situated too far from the station's transmitter to receive programs with an antenna.
Mandatory retransmission consent gave broadcasters the ability to seek compensation from distributors and established the basis for carriage disputes going forward.
[7] Between 2013 and 2020, the largest cable networks lost about $179.5 million in revenues from carriage disputes "that resulted in blackouts that were eventually resolved", according to the analysis firm S&P Global Intelligence in a 2021 report.
The dispute pitted the second largest United States cable system against one of the four major U.S. television networks, whose broadcasts included the popular prime time series American Idol and National Football League games.
Fox's then-parent company, News Corporation reportedly sought a monthly fee of $1 per subscriber; Time Warner offered 20 to 25 cents.
The deal encouraged other over-the-air broadcasters to seek higher retransmission payments, thereby putting upward pressure on cable and satellite bills.
Time Warner had offered to carry NFL Network on a narrower sports tier and argued that the relative scarcity of annual games–eight, expanded to 13–did not justify the cost.
[30][31][32] In 2019, the distribution of television programming on streaming media began to reduce the impact of carriage disputes on subscribers while weighing on cable companies and other traditional distributors.
Cord-cutting accelerated as streaming offerings gained a wider audience, and the cost of traditional cable bundles increased for both distributors and their subscribers.
As cord-cutting continues, "a dwindling number of subscribers are paying rising fees for movies and TV shows that are increasingly being moved to streaming.
According to The Verge, the dispute showed "that even with long-established apps, companies on both sides may agitate to get the upper hand as the dynamic of power evolves toward TV's future."
[41][42] In 2012, a carriage dispute of a different sort arose between Aereo, a small New York-based program distributor, and several major broadcasters, including CBS, NBC, ABC, Fox, Univision and PBS.
Broadcasters countered that the Aereo service went beyond the conventional antenna because it both recorded programs for later viewing and charged subscribers a monthly fee, thus acting as a middleman.
Instead, the provider may continue to carry the network under the existing terms, and the parties are encouraged to enter into a "Final Offer Arbitration" process with the CRTC to resolve the dispute.
In response to the move, Bell offered a free preview of the Sportsnet channels (which were carrying English broadcasts) for the duration of the blackout.
[53][54][51][55][52] RDS's parent English network TSN similarly offered a free preview, promoting its broadcasts of several upcoming Montreal Impact Major League Soccer matches (TSN is the exclusive English-language rightsholder of MLS in Canada; the Impact's regional rights, and the French national rights to the league, were held at the time by TVA Sports).
[63][64] In 2017, carriage disputes arose between Discovery and Sky in the UK and Germany, Com Hem in Sweden, DNA in Finland, and Boxer in Poland.
In 2010, then Senator John Kerry introduced draft legislation that would have given the FCC more oversight responsibility, with the power to monitor negotiations and impose binding arbitration if it deems discussions between broadcasters and distributors are not being carried out in good faith.
[13] In 2013, Representatives Anna Eshoo and Zoe Lofgren introduced the Video CHOICE (Consumers Have Options in Choosing Entertainment) Act, which would have enabled the FCC to prohibit channel blackouts during a dispute.
The measure would repeal retransmission consent but not the must-carry rule, and would require distributors to carry a signal for up to 60 days after a contract has expired.
[73] In January 2024, the Federal Communications Commission sought public comment on whether the agency should require carriers to provide rebates to compensate subscribers for blackouts.
FCC Chairwoman Jessica Rosenworcel argued that blackouts amount to consumer bait and switch, with carriers delivering fewer channels than they promised when subscribers signed up.
"And does the sports fan who was deeply impacted and personally offended by the blackout feel satisfied with a rebate that gives him change back from a Costco hot dog?"
Also dissenting was the American Television Alliance, which argued that blackouts represent the efforts of service providers to save subscribers from ever higher subscription fees due to rising retransmission costs.
For their part, broadcasters risk losing viewers, which in turn can reduce revenues from commercials and per-subscriber carriage fees.
[84][85] In January 2013, Time Warner Cable signed an $8.35 billion, 25-year contract with the Los Angeles Dodgers to carry and resell the Dodger-owned SportsNet LA.
TWC had reportedly asked other distributors for an initial $4 to $5 per-month per-subscriber, with carriage fees increasing yearly over the length of the contract.
[86][87] Los Angeles Times business reporter Joe Flint called the standoff a potentially "definitive moment for the world of sports programming, as the industry realizes that exorbitantly priced television deals can backfire.
[84] Some smaller cable companies, relying on revenues from broadband subscriptions, have been more willing to drop a bundled service, even at the cost of fewer television subscribers.
