Claiming that it’s reached an impasse as it seeks to negotiate a master carriage agreement for the Fox regional sports networks, the National Cable Television Cooperative Tuesday turned to the Federal Communications Commission for help.
The NCTC sent a four-page letter to FCC chairman Kevin Martin asking for enforcement of conditions relating to small cable companies being able to designate “bargaining agents,” which was imposed on News Corp. in 2004 as part of its purchase of a stake in DirecTV. News Corp. owns the Fox sports services.
In the letter, NCTC CEO Jeff Abbas claimed that Fox won’t let it review the existing contracts that some of its individual members -- small and midsized independent cable operators -- already have with various Fox RSNs.
While a number of NCTC members already have their carriage deals for Fox sports channels, Abbas said some have asked the NCTC to negotiate a master affiliation agreement for them with Fox.
“While News Corp. ostensibly claims to be willing to negotiate with the NCTC as a bargaining agent on behalf of its smaller cable-operator members, it has refused our requests that it acknowledge that those companies may share with the NCTC information crucial to the effective representation of their interests,” Abbas said in his letter. “As a result, News Corp. is evading its obligations under the order.”
The NCTC cannot effectively negotiate a master affiliation agreement on its members’ behalf without the ability to review members’ existing agreements, including key terms and conditions, such as license fees, according to Abbas. But the current contracts that NCTC members have include confidentiality clauses.
The NCTC has been “rebuffed” when it’s asked Fox for assurances that the programmer won’t try to enforce the confidentiality provisions of current or expired contracts that NCTC members have for the sports networks, the letter claimed.
“Although the NCTC has sought for more than one year to resolve this matter, News Corp. continues to stonewall,” the letter said. “The NCTC cannot effectively represent companies in obtaining an agreement to renew or extend an existing News Corp.-affiliated RSN agreement if those companies put themselves at risk of a lawsuit [even one that is lacking in merit].”
Fox officials hadn’t seen the letter when asked for comment.
“We're trying to obtain a copy of this letter ourselves, so we will need to review its contents before commenting further," said Tom Tyrer, Fox Networks Group senior vice president of communications and cross-platform operations.
In an interview, Abbas said Fox has suggested that it would consider easing up on the confidentiality provisions in exchange for “additional consideration” from NCTC members. Otherwise, Fox has said, it will enforce those clauses as drafted.
“What they will say is that for extra consideration, they’re willing to make that issue go away,” Abbas said. “That just doesn’t seem appropriate. I’d just as soon have clarification from the commission to know what our standing ground rules are.”
The NCTC has been requesting for more than one year that News Corp. recognize -- as specifically cited in the FCC order approving the DirecTV acquisition -- that the NCTC is a “bargaining agent” and should be considered as “standing in the shoes” of its members. Therefore, the NCTC maintained that it should be able to receive confidential information from its members as it negotiates on their behalf for the RSNs.
The NCTC is open to either reaching affiliation agreements for each individual sports network, or reaching one master contract that would include general terms and conditions, and then clauses relating to programming and license fees can be tailored to each specific sports service, Abbas said.
The letter to Martin also stated that the NCTC first contacted the Media Bureau about this matter nearly one year ago. In the interim, DirecTV sought, and was granted, the benefit of an RSN-related condition in connection with the approval of Comcast’s and Time Warner Inc.’s purchase of Adelphia Communications.
