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Consumers shouldn’t be penalized in cable disputes

Wednesday, March 10, 2010


WASHINGTON, D.C. — Cable-TV operators – including Time Warner Cable and Cablevision – have joined public interest groups Public Knowledge and the New America Foundation to petition the Federal Communications Commission to put an end to the alarming trend of consumers losing access to network programming when pay-TV operators and broadcasters are unable to reach business agreements.
Coming on the heels of Cablevision’s dispute with ABC, which resulted in New York-area Cablevision customers being denied coverage of part of Sunday’s Academy Awards broadcast, the petition seeks to change the rules in place at the FCC that govern the agency’s role in resolving disputes between cable companies and broadcasters. Specifically, the groups asked the FCC to consider creating a dispute resolution process at the Commission and to adopt rules that would stop broadcasters from tying their station with several other channels that they own.
Joel Kelsey, policy analyst for Consumers Union the non-profit publisher of Consumer Reports said, “Cable subscribers, who have already paid for service, should not be held hostage while two companies play a game of high-cost chicken. We commend these groups for urging the Commission to remedy a growing consumer issue. However, these proposed changes only represent half of the equation.”
Cablevision customers getting cut out of the Oscars broadcast was not the first time a business dispute between a cable company and a broadcaster have come to a head and left consumers with dark TV screens. Cablevision customers lost the Food Network and HGTV for several weeks in January, and there was nearly a blackout when negotiations between Time Warner Cable and Fox hit a tough patch last December.
“As channel owners seek to recoup revenues being lost by a declining advertising market and cable companies continue to raise rates with impunity, consumers are likely to see these disputes more frequently and they will only result in rising monthly costs. These groups have taken a major step toward finding a solution that will protect consumers, but the proposed policy changes need to be bolstered by reforms that give consumers more choice and provide a level playing field for the companies negotiating. When these negotiations breakdown, the FCC should also take steps to provide more transparency on what individual channels end up costing consumers, whether these carriage prices are a true reflection of value, and ultimately give cable subscribers more choice among channels and pricing.”
David Butler or Kristina Edmunson, 202-462-6262
Consumers Union of United States, Inc., publisher of Consumer Reports®, is a nonprofit membership organization chartered in 1936 to provide consumers with information, education, and counsel about goods, services, health and personal finance. Consumers Union’s publications and services have a combined paid circulation of approximately 8.3 million. These publications regularly carry articles on Consumers Union’s own product testing; on health, product safety, and marketplace economics; and on legislative, judicial, and regulatory actions that affect consumer welfare. Consumers Union’s income is solely derived from the sale of Consumer Reports®, its other publications and services, fees, noncommercial contributions and grants. Consumers Union’s publications and services carry no outside advertising and receive no commercial support.