Negotiations between television channels/networks and pay TV operators are a breed apart. The stakes are high and the consequence of failure – a “dark” screen – is all too public. But the critical factor that sets these negotiations apart is the actual regulation of the negotiations under three main categories of rules.
- Broadcasters may invoke “Must Carry” status or seek to negotiate terms for “retransmission” under FCC rules requiring “good faith” negotiations.
- Program Carriage rules protect channels and networks from certain abuses by operators. Conversely, Program Access rules ensure operators have certain rights to license programming.
- The FCC also has issued a series of orders in connection with mergers and other transactions, some of which allow an arbitrator to pick one offer or the other in “night” baseball-style arbitration when certain networks and operators cannot agree on terms of carriage.