News Corp.'s hit and run
A rancorous dispute between News Corp. and Cablevision has baseball fans in Long Island missing more playoff pitches than Alex Rodriguez. News Corp. has barred Cablevision from carrying its television programming, including the baseball playoff broadcasts from Fox TV stations in New York and Philadelphia, unless Cablevision pays significantly higher fees. The company even barred Cablevision’s broadband subscribers from watching Fox programs from News Corp. outlets online for several hours on Saturday. It was a thuggish move that undermined News Corp.'s argument that the companies should work out their differences without government interference.
The tussle between the two companies over “retransmission fees” — News Corp. wants Cablevision to pay $150 million a year for the right to carry six local stations and cable networks, up from $70 million in the last contract — is the latest in a series that has become distressingly familiar to pay-TV viewers. In previous face-offs, some cable operators have tried to mollify their customers by steering them to websites where they could watch blacked-out shows. Shortly after the Cablevision blackout began on Saturday, however, News Corp. barred Cablevision’s high-speed Internet customers from accessing Fox.com. Instead, they were redirected to a website presenting Fox’s side of the dispute.
The ban at Fox.com also stopped Cablevision’s Internet customers from watching Fox programs on Hulu.com, a popular online video outlet that News Corp. co-owns. A Fox spokesman said the company lifted the Fox.com ban several hours later after realizing that it also affected people who subscribed only to Cablevision’s Internet service, not its cable TV packages.
The problem isn’t just that News Corp. harmed some innocent bystanders. It’s that it discriminated against Internet users based on the identity of their broadband provider. The company’s actions added a troubling element to the debate over Net neutrality. Until Saturday, the debate had focused on the potential power of Internet service providers like Cablevision to pick winners and losers among websites and services. Now it’s clear that the power may flow in the other direction as well.
Although the Federal Communications Commission adopted a principle in 2005 that “consumers are entitled to access the lawful Internet content of their choice,” it hasn’t asserted any authority over content providers — and rightly so. The Net neutrality rules that Chairman Julius Genachowski has struggled to push through the commission would apply only to broadband access services. Nevertheless, by taking Internet users hostage in its dispute over cable TV fees, News Corp. has given the FCC fresh evidence of the threats facing the Net today, as well as a fresh incentive to act.