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Carriage dispute
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Carriage dispute
A carriage dispute is a disagreement over the right to "carry", that is, retransmit, a broadcaster's signal. Carriage disputes first occurred between broadcasters and cable companies and now include direct broadcast satellite and other multichannel video programming distributors.
These disputes often involve financial compensation – what the distributor pays the television station or network for the right to carry the signal – as well as what channels the distributor is permitted or required to retransmit and how the distributor offers those channels to its subscribers. While most carriage disputes are resolved without controversy or notice, others have involved programming blackouts, both threatened and real, as well as strident public relations campaigns. Carriage disputes have occurred both in the United States and internationally. Cord-cutting has lessened the impact as more people move from traditional distributors to streaming media services.
The history of carriage disputes can be seen as having two distinct circumstances: the first involving over-the-air broadcasters, whose signals can be received with an antenna; the second involving broadcasters transmitting via cable, satellite or other means—but not over the air. In the United States, the first led to a quagmire of legal disputes involving the Federal Communications Commission and the courts, shifting regulations, and questions over copyright law – all revolving around the basic question of whether a carrier has an inherent right to retransmit an over-the-air signal. Broadcasters accused carriers of being "leeches", making money off of programming content that they contributed nothing to produce. Carriers countered that their role was largely passive, because they were merely redistributing freely available signals more widely. By contrast, carriage disputes involving broadcasters who do not use the public airwaves, while representing many high-profile encounters, have raised fewer legal and policy questions, playing out largely at the negotiation table and in the court of public opinion.
The legal precedent for carriage disputes dates back to 1934 legislation, which required a broadcaster to get permission before using programming from another broadcaster. The law was later applied to cable companies, as well. 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. Stations objected that they were not being compensated for this retransmission or that they were having to compete with more distant stations that duplicated their content. From February 15, 1966, to December 18, 1968, the United States Federal Communications Commission barred cable companies from importing non-local broadcast signals into the top 100 television markets – while allowing cable companies to petition for exceptions. After an interim period, the FCC partially lifted these restrictions in 1972, eliminating them entirely by the end of the decade.
The issue was finally resolved with the 1992 Cable Television Consumer Protection and Competition Act. Among its provisions, the act mandated that distributors must carry local stations who make their signal available for free, but must also get retransmission consent before a signal can be retransmitted. Mandatory retransmission consent gave broadcasters the ability to seek compensation from distributors and established the basis for carriage disputes going forward. At first, the larger broadcasters negotiated not for higher fees, but for inclusion of their newer, lesser known, non-terrestrial channels. Fox, for example, obtained distribution for FX (now owned by the Walt Disney Company); NBC for CNBC. The practice complicated carriage disputes by making bundled tiers not just a marketing choice, but a contractual obligation.
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. Paramount Global topped the list, losing $40 million over the period, while Comcast, Fox Corporation, and the National Football League each lost more than $30 million. The most costly carriage disputes pitted cable networks primarily against Dish Network, as well as Suddenlink Communications (now rebranded "Optimum") and Verizon Communications. (Comcast, which is both an internet service provider and a broadcasting and cable company, was at different times on both sides of the negotiating table.)
S&P Global said the blackouts came from cable networks seeking better deals "with traditional multichannel operators, which still serve more than half of the video subscription market in the U.S. and still supply billions of dollars in revenues for the cable network industry." Even with steady subscriber losses, the traditional cable industry remained a profitable business.
The 2009 dispute between Time Warner Cable and Fox is an example of a carriage dispute involving an over-the-air broadcaster. 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. Both companies mounted aggressive public relations campaigns, including dedicated websites and advertising. Fox suggested that viewers look into alternatives to Time Warner, including satellite and Verizon's Fios service. Time Warner Cable countered that it was trying to rein in expenses that would ultimately be paid by subscribers. The companies ultimately settled close to the deadline, and, as is typical with carriage disputes, did not disclose the terms. The deal encouraged other over-the-air broadcasters to seek higher retransmission payments, thereby putting upward pressure on cable and satellite bills.
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Carriage dispute
A carriage dispute is a disagreement over the right to "carry", that is, retransmit, a broadcaster's signal. Carriage disputes first occurred between broadcasters and cable companies and now include direct broadcast satellite and other multichannel video programming distributors.
These disputes often involve financial compensation – what the distributor pays the television station or network for the right to carry the signal – as well as what channels the distributor is permitted or required to retransmit and how the distributor offers those channels to its subscribers. While most carriage disputes are resolved without controversy or notice, others have involved programming blackouts, both threatened and real, as well as strident public relations campaigns. Carriage disputes have occurred both in the United States and internationally. Cord-cutting has lessened the impact as more people move from traditional distributors to streaming media services.
The history of carriage disputes can be seen as having two distinct circumstances: the first involving over-the-air broadcasters, whose signals can be received with an antenna; the second involving broadcasters transmitting via cable, satellite or other means—but not over the air. In the United States, the first led to a quagmire of legal disputes involving the Federal Communications Commission and the courts, shifting regulations, and questions over copyright law – all revolving around the basic question of whether a carrier has an inherent right to retransmit an over-the-air signal. Broadcasters accused carriers of being "leeches", making money off of programming content that they contributed nothing to produce. Carriers countered that their role was largely passive, because they were merely redistributing freely available signals more widely. By contrast, carriage disputes involving broadcasters who do not use the public airwaves, while representing many high-profile encounters, have raised fewer legal and policy questions, playing out largely at the negotiation table and in the court of public opinion.
The legal precedent for carriage disputes dates back to 1934 legislation, which required a broadcaster to get permission before using programming from another broadcaster. The law was later applied to cable companies, as well. 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. Stations objected that they were not being compensated for this retransmission or that they were having to compete with more distant stations that duplicated their content. From February 15, 1966, to December 18, 1968, the United States Federal Communications Commission barred cable companies from importing non-local broadcast signals into the top 100 television markets – while allowing cable companies to petition for exceptions. After an interim period, the FCC partially lifted these restrictions in 1972, eliminating them entirely by the end of the decade.
The issue was finally resolved with the 1992 Cable Television Consumer Protection and Competition Act. Among its provisions, the act mandated that distributors must carry local stations who make their signal available for free, but must also get retransmission consent before a signal can be retransmitted. Mandatory retransmission consent gave broadcasters the ability to seek compensation from distributors and established the basis for carriage disputes going forward. At first, the larger broadcasters negotiated not for higher fees, but for inclusion of their newer, lesser known, non-terrestrial channels. Fox, for example, obtained distribution for FX (now owned by the Walt Disney Company); NBC for CNBC. The practice complicated carriage disputes by making bundled tiers not just a marketing choice, but a contractual obligation.
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. Paramount Global topped the list, losing $40 million over the period, while Comcast, Fox Corporation, and the National Football League each lost more than $30 million. The most costly carriage disputes pitted cable networks primarily against Dish Network, as well as Suddenlink Communications (now rebranded "Optimum") and Verizon Communications. (Comcast, which is both an internet service provider and a broadcasting and cable company, was at different times on both sides of the negotiating table.)
S&P Global said the blackouts came from cable networks seeking better deals "with traditional multichannel operators, which still serve more than half of the video subscription market in the U.S. and still supply billions of dollars in revenues for the cable network industry." Even with steady subscriber losses, the traditional cable industry remained a profitable business.
The 2009 dispute between Time Warner Cable and Fox is an example of a carriage dispute involving an over-the-air broadcaster. 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. Both companies mounted aggressive public relations campaigns, including dedicated websites and advertising. Fox suggested that viewers look into alternatives to Time Warner, including satellite and Verizon's Fios service. Time Warner Cable countered that it was trying to rein in expenses that would ultimately be paid by subscribers. The companies ultimately settled close to the deadline, and, as is typical with carriage disputes, did not disclose the terms. The deal encouraged other over-the-air broadcasters to seek higher retransmission payments, thereby putting upward pressure on cable and satellite bills.