FCC urges News Corp., Cablevision to end stalemate

Following a brief phone conference Tuesday between executives at News Corp. and Cablevision, both sides confirmed shortly thereafter that they had failed to reach an agreement over retransmission fees, although they agreed to resume discussions today.

Meanwhile, Julius Genachowski, the chairman of the Federal Communications Commission - under pressure by Senate Democrats including John Kerry (D-Mass.) and Frank Lautenberg (D-N.J.) to arbitrate the dispute - released a statement Tuesday urging the companies to resolve the stalemate. But he stopped short of offering to mediate it.

"I am deeply troubled that Cablevision and Fox are spending more time attacking each other through ads and lobbyists than sitting down at the negotiating table," Genachowski said. "They shouldn't punish consumers because of their unwillingness to reach a deal."

Kerry, meanwhile, told Genachowski that he intends to introduce legislation in the so-called "lame duck" session - a special work period that follows the Nov. 2 elections - that will prevent signals from being pulled off cable systems during retransmission fee negotiations.

In a statement issued after Tuesday's failed talks, Cablevision, which owns Newsday, said that "both parties have a position, but only Cablevision has joined with more than 50 government leaders with a solution, binding arbitration under the direction of a neutral third party. By now it should be clear even to News Corp. that binding arbitration is the fastest and fairest way to return Fox programming to our customers."

In its statement, Fox, which has rejected arbitration, said: "The fact is Cablevision does not operate, as other companies do, with their customers' best interests as their top priority. Instead, they repeatedly look for fights that cause enormous collateral damage. Unfortunately, this damage is directly affecting millions of subscribers."

The lack of a deal over retransmission fees means the continuation of a blackout that began Saturday morning seconds after midnight, when News Corp. pulled both WNYW/5 and My9 from Cablevision, affecting some 3 million subscribers.

Cablevision says it pays News Corp. up to $70 million annually for all of its various Fox channels, while Fox is seeking $150 million.