Legislation was introduced in Wisconsin during the 2007-08 legislative session seeking to establish an arbitration process forcing mandatory carriage by a cable provider of a programmers channel if the two sides cannot reach a carriage agreement on their own. Fortunately, through efforts of the WCCA and its members, the legislation died in committee as legislators came to the conclusion that this is an issue best resolved by market forces and not government intervention.
The Facts about Mandatory Carriage Disputes:
- Arbitration would inevitably drive prices up – one need look no further than baseball to see what arbitration has done to baseball salaries. Arbitration would also raise cable programming and consumer costs. It’s ironic that organizations such as the NFL do not offer arbitration to their players yet they wish to impose government mandated arbitration in private disputes.
- It is well established that cable is a first amendment speaker. Just as the government would not, and legally could not, require that a newspaper carry every syndicated columnist seeking distribution, the government may not require that a cable operator carry every network seeking carriage.
- Where do legislators draw the line on which commercial disputes or negotiations should be subject to mandatory arbitration? If a manufacturer and a grocery chain can’t reach agreement on whether to stock a particular product, or if so, its particular shelf placement, should the dispute be subject to mandatory arbitration? If a broadcaster and an advertiser don’t agree on the price and timing of a TV spot should the dispute be subject to mandatory arbitration? If a potential car buyer and a car dealer can’t agree on a price should the dispute be subject to mandatory arbitration? Where does it all end?
- State program carriage bills are explicitly preempted by federal Cable Act.
– Section 616 of the Act establishes federal, uniform procedures for program carriage disputes and gives enforcement authority to the FCC.
– Section 636(c) of the Act expressly preempts any state law or regulation that is inconsistent with the Act.
– Section 624 of the Act prohibits states from imposing requirements regarding the provision or content of cable services unless specifically allowed by the Act, and prohibits cable franchising authorities (which include states) from regulating cable service, facilities, and equipment except to the extent consistent with the Cable Act.
- The federal Communications Act does not allow states to supplement program carriage laws. The Federal Communications Act leaves no room for state regulation of cable service except where explicitly specified. Section 2(a) of the Communications Act grants the FCC exclusive jurisdiction over cable service, all persons engaged in the provision of cable service, and the facilities which relate to such service, as provided in Title VI of that Act. Title VI expressly gives the FCC plenary authority over program carriage issues, and bars states from adopting carriage requirements of their own.
- State program carriage bills violate the Commerce Clause of the U.S. Constitution. Both Congress and the FCC have determined that cable service is an interstate service that, except to the extent that state or local governments are explicitly granted some regulatory authority, must be regulated at the federal level to ensure nationally uniform standards and requirements, State program carriage bills restrict interstate commerce by interfering with the federal interest in national uniformity of cable service regulation.
- State program carriage bills violate the First Amendment to the U.S. Constitution. Cable operators exercise their right to free speech by determining which stations or programs to include in their channel line-up, and any law that requires cable operators to carry and transmit particular programming violates this right.
- State program carriage bills violate the Fifth Amendment of the U.S. Constitution. State program carriage bills that force cable operators to make capacity on their systems available to unaffiliated programming providers without providing just compensation from those providers violates the Fifth Amendment’s prohibition on the uncompensated taking of private property.
