Broadcasters Diss Carriage Arbitration

TV stations are calling on the FCC to reject some pay-TV industry calls to make broadcasters submit cable and satellite carriage disputes to binding arbitration by a third-party negotiator.

The idea is being pushed at the FCC the American Cable Association, DBS operator Echostar and BellSouth.

Groups representing affiliates of the four broadcast networks, the stations most likely to be forced into arbitration, told the FCC in a filing last week that such a mandate would "eviscerate" current law allowing stations to negotiate either cash payment or other compensation in return for carriage of their channels on cable and satellite systems.

If a deal can't be reached, stations have the right to withhold their channels.

The three pay-TV providers, which unlike the big cable operators, are often forced to pay actual cash to obtain rights to carry broadcast channels, say the TV stations are abusing control over "must-have" programming to draw concessions.

Big cable operators almost never pay cash for channels, although they routinely agree to carry cable channels owned by the broadcast networks as a condition of gaining permission to carry their O&Os.

Cable operators also have agreed to carry local cable news channels owned by some network affiliates. "Now that pockets of competition may be emerging, it would be a cruel hoax on the American people to impose regulations that would deprive viewers of the long hoped-for benefits," said broadcasters.

The arbitration idea and the stations' reply were submitted to the FCC as input for an agency report on rules affecting competition in the TV marketplace that the FCC must submit to Congress Sept. 8.