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Cablevision Accuses Fox of “Bad Faith” In Retrans Fight

San Francisco, October 25th, 2010 — Cablevision Systems on Monday accused Fox Television parent News Corp of violating federal regulations that govern the terms of negotiations underlying business agreements between video distributors and broadcasters.

The move sets the stage for a potential intervention by the Federal Communications Commission, or failing that, legislative action in Congress.

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San Francisco, October 25th, 2010 — Cablevision Systems on Monday accused Fox Television parent News Corp of violating federal regulations that govern the terms of negotiations underlying business agreements between video distributors and broadcasters.

The move sets the stage for a potential intervention by the Federal Communications Commission, or failing that, legislative action in Congress.

Both Cablevision and Fox have been locked for more than a week in an impasse over the annual fees that Cablevision pays Fox for its television programming.

Cablevision says that Fox is demanding more than double the $70 million that it’s been paying for the programming, while a spokesman for Fox says that the company is not demanding that amount at all.

“For Cablevision to still be making those claims is yet another example of their ploy to secure an advantage through government intervention,” said Fox in a statement issued to the media.

“News Corp. never engaged in real negotiations, they only made a “take it or leave it” proposal for Fox 5, and they timed the Fox blackout to leverage major national sporting events to force Cablevision to accept unreasonable demands,” said Charles Schueler, Cablevision’s executive vice president of communications.

Fox said Cablevision is lying.

“From the genesis of our talks with Cablevision, Fox has negotiated in good faith. We have never made any “take it or leave it” demands, nor are we asking for $150 million in fees,” Fox said in its Monday statement on the negotiations.

Under the FCC’s rules that define what a “good faith” negotiation constitutes in retransmission consent negotiations, broadcasters are prohibited from offering a “single unilateral proposal” during the negotiations with video distributors such as cable companies and satellite companies.

The federal government has such rules governing the broadcasters because the broadcasters are using the public spectrum to transmit their programming.

And despite Fox’s rhetoric about government intervention in a private business dispute, the company benefits from such “government intervention” because existing law prohibits cable companies from going to other broadcasters to replace the programming that is being withheld by Fox.

Under pressure from lawmakers in Congress, William Lake, the FCC’s media bureau chief on Friday sent out a letter to both sides asking them to submit evidence that they’re negotiating in good faith, and to submit that information by close of business Monday.

It’s unclear what options the FCC has in light of the claims made by Cablevision on Monday, but its claims are likely to spark off at the least congressional hearings after the mid-term elections, and the airing of legislation proposed last week by Senate Communications Subcommittee Chairman Sen. John Kerry, D-Mass.

Cablevision is part of a wide-ranging coalition of cable companies, satellite companies, non-profit advocacy groups and think tanks that petitioned the commission earlier this year to change the rules regarding retransmission consent saying that they’re out of date.

Among other things, the group wants broadcasters to allow video distributors to continue to be able to transmit broadcast programming if the fee negotiations break down and the contracts between two sides expire.

For a detailed discussion about the retransmission consent debate, and to see what ideas have been floated in the policy community about how the law might change, check out the Intellectual Property Breakfast Club’s June discussion panel on the subject.

Photo courtesy of: Angel Raul Ravelo Rodriguez

Sarah Lai Stirland is the Director of Digital Community at Broadband.Money. Sarah previously worked with Breakfast Media's CEO, Editor and Publisher Drew Clark at National Journal's Technology Daily. She has covered business, technology, government and civic engagement, finance, and telecommunications and tech policy from New York, Washington and San Francisco. Her work has appeared in Personal Democracy Media's Civic Hall, Wired, Red Herring, and Portfolio.com. She's also a radio and podcast producer, and she's worked at KALW Public radio in San Francisco. She's a native of London and Hong Kong, and is currently based in the Bay Area.

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Big Tech

Big Tech Reforms Need Review of Cybersecurity to Ensure Capabilities Will Not Be Diminished, Event Hears

Despite their efforts to improve consumer competition and security, some argue Congress’s legislation could have unintended effects.

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Photo of John Negroponte courtesy Duke Univesity

WASHINGTON, May 26, 2022 – Experts warned Monday that antitrust legislation being considered to rein in Big Tech could exacerbate cybersecurity concerns that may jeopardize smaller players.

During a Foreign Policy panel hosted on Monday, American Enterprise Institute Senior Fellow Klon Kitchen said many startups are dependent on the underlying datasets, technologies, and code provided by large technology companies.

He argued that while giants like Microsoft can invest billions of dollars in cybersecurity, smaller companies simply do not have the capital necessary to invest in their own protocols. He called for legislation to have a “robust and honest” security review before it is adopted – reviews he argued are not currently taking place.

Though the panelists did not point specifically to any one bill that is particularly harmful, there are currently several high-profile bills aimed at reforming the tech industry.

One such bill that has been in the spotlight for several months is Sen. Amy Klobuchar’s, D-Minn., Consolidation Prevention and Competition Promotion Act of 2021, or S.3267. This bill would severely limit large tech companies from engaging in the acquisition of nascent competitors. The bill has been introduced in the Senate and has been read twice and referred to the Committee on the Judiciary.

American companies targeted in a field with global players

Former Deputy Secretary of State John Negroponte also expressed concerns Monday about various antitrust legislation before Congress.

Maggie Lake and John Negroponte

“The various proposed bills out there generally only apply to a handful of United States companies, and in addition to that, they would not apply at all to foreign companies,” he said. “This is not a purely domestic market, although sometimes reading these laws, you would think that the drafters believe [that is the case].”

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Antitrust

FTC Commissioner Concerned About Antitrust Impact on Already Rising Consumer Prices

Noah Phillips said Tuesday he wants the commission to think about the impact of antitrust rules on rising prices.

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Screenshot of Federal Trade Commissioner Noah Phillips

WASHINGTON, May 17, 2022 – Rising inflation should be a primary concern for the Federal Trade Commission when considering antitrust regulations on Big Tech, said Commissioner Noah Phillips Tuesday.

When considering laws, “the important thing is what impact it has on the consumer,” said Phillips. “We need to continue to guard like a hawk against conduct and against laws that have the effect of raising prices for consumers.”

Current record highs in the inflation rate, which means money is becoming less valuable as products become more expensive, has meant Washington must become sensitive to further price increases that could come out of such antitrust legislation, the commissioner said.

Phillips did not comment on how such movies would mean higher prices, but that signals, such as theHouse Judiciary Committee’s antitrust report two years ago, that reign in Big Tech companies and bring back enforcement of laws could mean higher prices. He raised concerns that recent policies are prohibiting competition rather than facilitating it.

This follows recent concerns that the American Innovation and Choice Online Act, currently awaiting Senate floor consideration, will inhibit America’s global competitiveness by weakening major American companies, thus impairing the American economy. That legislation would prohibit platform owners from giving preference to their products against third-party products.

This act is one of many currently under consideration at Congress, including Ending Platform Monopolies Act and Platform Competition and Opportunity Act.

Small businesses have worried that by enacting some legislation targeting Big Tech, they would be impacted because they rely on such platforms for success.

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Big Tech

Small Business Owners Call for FTC, DOJ to Institute Antitrust Measures Against Big Tech

Small business owners vocalized concerns at a forum hosted by the FTC and the DoJ.

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Screenshot of FTC Chairwoman Lina Khan

WASHINGTON, May 17, 2022 – Small business owners and employees urged the Federal Trade Commission last week to take further action against big tech company mergers that dominate their markets.

With Washington’s focus on scrutinizing potential mergers, small business members that appeared on a forum Thursday hosted by the FTC and Justice Department pushed for antitrust measures against market monopolization that they said undermines small business success. Jonathan Kanter, the assistant attorney general for the antitrust Division, called this a “new generation of digital giants.”

Saagar Enjeti, host of a media podcast, expressed his inability to participate in a truly free and open internet due to the influence of big tech companies, in which he said there has been a rash of misinformation on the coronavirus, the 2020 presidential election, and the Russian invasion of Ukraine.

Bradley Tusk, a venture capitalist who invests in tech startups, said he wants the FTC to have “more scrutiny” on big tech mergers. “The FTC should aggressively do everything in its power to do the job itself,” said Tusk.

Erin Wade agreed for more scrutiny on monopolies in which DoorDash and UberEats compete. As a restaurant owner, she said delivery mega platforms are harming restaurant profits and disrupting their business via tactics including underpricing their delivery fees and “bund[ling] orders so badly it damages customer relations.

“Small businesses are central to the American economy and American democracy,” Wade said during the event, pushing for the FTC to place more scrutiny on big tech companies.

According to FTC Chairwoman Lina Khan, as several digital platforms continue to control the market today, anti-trust agencies should do what they can to encourage competition and provide checks on these big tech companies.

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