Requires negotiation of fair terms between cable television franchisees and competing independent cable channels; requires the public service commission to conduct arbitration if such terms and conditions can not be reached; applies to all such agreements entered on or after January 1, 2011.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9092
SPONSOR: Simanowitz TITLE OF BILL: An act to amend the public service law, in relation to
requiring negotiation of fair terms between cable television franchisees
and competing independent cable channels
PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to
require all cable franchisees to negotiate fairly to determine terms and
conditions under which competing independent cable channels will be
carried by the franchisee and, in the event such agreement as to terms
and conditions cannot be reached, provisions require the commission to
conduct an arbitration of the matter.
SUMMARY OF PROVISIONS: Section 1 of the bill amends paragraph (b) of
subdivision 2 of section 215 of the public service law, as added by
chapter 83 of the laws of 1995, by adding a new provision requiring
franchisees to negotiate fairly to determine the terms and conditions
under which competing independent cable channels will be carried by the
franchisee and, in the event such agreement as to terms and conditions
cannot be reached, provisions require the commission to conduct an arbi-
tration of the matter.
Section 2 provides for this act to take effect immediately and shall
apply to any agreement between cable television franchisees and compet-
ing independent cable channels entered into on or after January 1, 2011.
JUSTIFICATION: The cable television industry continues to see a
proliferation of . "vertically integrated cable operators" which are
companies that own both the franchise to provide cable television
service, as well as cable channels that provide programming on their
parent cable system in addition to other systems.
In situations where the vertically integrated operators own channels
that produce programming in competition with other independently-owned
cable channels, the franchisee-owned channels are given preferred status
in their placement on a standard service tier, whereas the
independently owned channels are placed on a more expensive tier. This
gives the vertically integrated companies incredible bargaining power
when negotiating carriage agreements with the independently-owned chan-
nels, These vertically integrated operators use their franchise owner-
ship to deny access to programming to their competitors in an effort to
gauge prices and protect their own financial interests,
In many cases, such systems have resulted in virtual monopolies for
these companies in terms of both the services they provide and the
programming made available on their cable systems. This has bean espe-
cially true in markets like New York City where currently only two
companies, Cablevision and Time Warner, both vertically integrated cable
operators, hold the franchise rights for approximately 90t: of customers
throughout the city.
The bottom line is that this invariably results in customers being
unable to see much-desired programming for extended periods of time
while the companies fail to reach an agreement. In New York we have
seen this battle played out repeatedly between Time Wanner and Cablevi-
sion. Currently, Time Warner is engaged in a battle with Cablevision
over carriage rights to programming produced by Cablevision owned
stations MSG, MSG+ and FUSE, which includes fan access to major New York
sports teams including the ongoing seasons for the New York Rangers and
New York Knicks.
This is an identical battle to the one in 2005 where Time Warmer battled
with Cablevision over carriage rights to programming produced by Cablev-
ision owned stations MSG and FSUY, which included fan access to Mats
games. Prior to that in 2002-2003, Cablevision battled with the indepen-
dently-owned YES Network for more than year over carriage rights to YES
programming including Yankees games.
Until such time as these vertically integrated cable operators are
required to negotiate fairly and submit to arbitration when there is an
impasse, these types of interruptions in access to programming will
continue and the viewing public will suffer the consequences.
Therefore, it is essential that we take the lead on this issue of
nationwide importance and require vertically integrated franchisees in
the state of New York to negotiate fairly and, if necessary, submit to
arbitration to determine the terms and conditions on which independent
cable channels that compete with the affiliated cable channels will be
carried by the franchisee.
PRIOR LEGISLATIVE HISTORY: New Bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.
EFFECTIVE DATE: This act shall take effect immediately and shall
apply to any agreement between cable television franchisees and compet-
ing independent cable channels entered into on or after January 1, 2011.
