“We’re from the government, and we’re here to help.” Yeah, you know that punchline, right?
I saw a report from NPR that FCC Chairman Tom Wheeler had decided to do just that in the dispute between Dish Network and Sinclair Broadcasting. As reported in the Wall Street Journal yesterday, Dish blacked out some 150 local stations owned or operated by Sinclair as a result of their ongoing distribution contract renegotiation dispute. The blackout affects some 5 million consumers in 79 markets.
Enter Chairman Wheeler to the rescue. Per the NPR article,Wheeler stated “We will not stand idly by while millions of consumers in 79 markets across the country are being denied access to local programming.”
Just one problem: Consumers are not being denied access to local stations–particularly to local news, weather and information on their local NBC, ABC, CBS and Fox affiliates. These affiliates are required–by the FCC–to provide free digital broadcasts, meaning consumers are perfectly able to access these stations for relatively modest investments in a digital antenna for their television. Moreover, in most markets Dish is not the sole distributor of paid-access television, meaning consumers also have the option of switching to a different television service provider. Indeed, as reported by both NPR and the WSJ, Dish is already hemorrhaging subscribers in large part due to service interruptions that have come to characterize Dish’s negotiating tactics with local station owners. And no doubt Dish has taken that into account in their negotiation strategy with Sinclair.
Where the FCC should act is in clarifying its rules regarding negotiation rights and station ownership. Two weeks before the blackout, Dish filed a complaint with the FCC regarding Sinclair’s negotiating tactics–which revolve in part around whether Sinclair was the property rights to negotiate on behalf of several stations it operates, but does not own. The FCC issued a rule forbidding such negotiations, but Sinclair alleges their operating agreements were grandfathered in. If the FCC were more clear in its rules and interpretations, perhaps the contracting dispute would have resolved itself already without the need for Chairman Wheeler to mount his white horse and ride to the rescue.
putation, regulation, and market organization issues in the global wine industry. It includes a paper I published with a former MS/JD student, Gina Riekhof, on “Politics, Economics, and the Regulation of Direct Interstate Shipping in the Wine Industry“, which originally appeared in the May 2005 issue of the American Journal of Agricultural Economics.