Regulation of Distribution

by Baindu N. Saidu

Distribution refers to the means by which television programming is delivered to consumers. It is done through traditional means like Broadcast, Cable or Satellite television, or through newer means like Video on Demand (VOD), Digital Video Recording (DVR), and online Subscription Video On Demand (SVOD) services like HULU Plus and Netflix.

When it comes to overseeing and regulating of these different means of mass television distribution, the Federal Communication Commission (FCC) is the principle government agency in charge. Its jurisdiction covers the means of mass emerging television technologies at the intersection of telephone, internet, computing, and digital signals. [1].


via the FCC website (

Several events have been ongoing during this semester related to the regulatory and legal aspects of distribution include a satellite provider, Dish’s disputes with both cable and broadcast networks, and the FCC’s ongoing plans for an incentive auction to reclaim spectrum space for wireless operators.

Dish Network vs. AMC Networks

The Networks’ dispute started years earlier with Cablevision’s lawsuit against Dish over their Voom HD channel which Dish stopped carrying in 2008. AMC was spun off from Cablevision in 2011. In April 2012, Dish notified AMC that it would drop their channels and by July, when their contract expired, Dish removed AMC Network channels AMC, WEtv, IFC, and Sundance from its lineup [2].

The companies indicated different reasons for the dispute. AMC stated that DISH dropped its programming because it wanted to gain leverage in an unrelated lawsuit involving Cablevision and their Voom HD channel [3]. DISH, conversely stated that the dispute was over “bundling,” in which big networks like AMC try to sell several of their channels, both high- and low-rated, to providers in a bundle to get a better price [4].


Image via Deadline website (

By September, Dish’s 14 million subscribers had been without any AMC channels for more than two months and feared not be able to view the season premiere of the AMC hit show, The Walking Dead, set to premiere October 14. Speaking on the dispute, Dish’s senior vice president of programming, Adam Shull stated that “The problem is they’re asking me to pay for four channels for really what is the price of three shows,” thus Dish wouldn’t be paying for any AMC shows [5].

On their part, AMC turned to social media in a quest to get their channels back on Dish, launching a YouTube video contest for angry Dish subscribers called “Hey DISH, Where’s my AMC?” [6].

The conflict would not be resolved until October 21 when Cablevision and AMC Networks settled their lawsuit with Dish Network for $700 million. The deal brought to end a dispute over whether Dish breached an affiliate agreement by terminating AMC’s Voom HD Network in 2008. At a trial that began in late September, AMC sought some $2.4 billion in damages from what it believed was Dish’s improper termination. Dish had defended itself by saying that it had the authority to cancel the Voom deal based on a contractual clause requiring Cablevision/AMC to invest $100 million per year on the channel. As part of the deal Dish also reached a new carriage agreement with AMC, bringing the network back to their lineup along with IFC, Sundance, and WEtv [7].

Dish Network’s AutoHop vs. Broadcasters

Image via Dish Network Website (

Another battle Dish Network has been involved in pertains to the AutoHop feature for its DVR systems, Hopper and Joey. Introduced in March, Autohop, an International Consumer Electronics Show (CES) Innovations 2013 Design and Engineering Award Honoree, allows users who are watching Primetime Anytime recordings to completely skip commercials. When the user starts watching a recording, they are allowed to choose whether or not to skip commercials. Users who choose to skip the commercials move from segment to segment of TV shows without having to watch the ads [8]. This feature has undoubtedly caused uproar with broadcasters, who depend on ad sales for a majority of their revenue.

In May, three of the major broadcasters (CBS, NBC, and Fox) filed suit against Dish Network in Los Angles, contending that the technology violated copyright law. Dish simultaneously filed a suit against ABC, CBS, and NBC in New York seeking a declaratory judgment affirming the legality of their technology [9].  In documents filed August 22, Fox’s lawyer argued that AutoHop was in “violation of the express terms and conditions of its contracts with Fox and federal copyright law. Both parties argued their respective points of view in front of U.S. District Court judge, Dolly Gee, on September 21 in Los Angeles. On November 6, Gee denied Fox’s request for a preliminary injunction that would shut AutoHop down. Gee, in denying Fox said, “Although Dish defines some of the parameters of copying for time-shifting purposes, it is ultimately the user who causes the copy to be made.” She also pointed out that Fox hadn’t proved there would be “irreparable damage” if no injunction was issued. Any harm to Fox, she said, could be relieved by monetary damages. The judge did agree with Fox though that Dish had likely committed copyright infringement and broken the contract between the two companies in making copies of Fox programming for alleged quality assurance [10].

On November 9, Fox filed an appeal against the denial of its request for an injunction, moving the matter from the U.S. District Court to the U.S. Court of Appeals for the Ninth District[11]. More legal action from broadcasters followed on November 24 when ABC sought a preliminary injunction from U.S. District Judge Laura Taylor Swain in Manhattan federal court to also block AutoHop [12].

The broadcasters’ reason for going after AutoHop is that it “will ultimately destroy the advertiser-supported ecosystem” they depend on for revenue [13]. The networks make more than $19 billion a year in advertising, money that pays for the high cost of programming. Without advertising, network executives say, media companies would have to charge distributors three times the current rate for their signals, added costs which would be passed on to consumers. Dish, on its part, said that it believes that the AutoHop feature does not violate the networks’ copyrights. Instead, the company said AutoHop is simply an enhancement of existing ad-zapping technologies, and ultimately a matter of consumer choice [14].

FCC Incentive Spectrum Auction

Image via Cio website (

The FCC is a quasi-autonomous commission that has elements of each of the legislative, judicial, and executive branches of government. It is part of the group of independent regulatory agencies (see also the FAA, FTC, and SEC) [15]. In its control of television, the FCC performs several distinct functions such as rulemaking, licensing, registration, adjudication, enforcement, and informal influence [16].

Last February, President Obama signed a law empowering the FCC to buy spectrum from broadcasters wishing to give it up and then turn around and auction it to wireless broadband carriers. The FCC is working on the implementing rules for the incentive auction — so-called because broadcasters have a cash incentive to give up their spectrum [17]. They have hopes that the auction could begin as early as 2014, but have until September 2022 to conduct the sale and license the airwaves to wireless companies [18].

For the most part, full-service broadcasters with major network affiliations and newsrooms have said they have no interest in the incentive auction, preferring to hang on to their entire spectrum so they can offer new services. However, other broadcasters that are struggling see the incentive auction as a way to recoup some or all of their investments. Speculators have also entered the market, buying up marginal stations with the intention of selling their spectrum at a profit in the FCC auction [19].

Fall FCC Spectrum Auction News

  •  September 07, 2012: FCC Chairman Julius Genachowski set to release the FCC’s framework for the spectrum auction with target of  having a report and order voted by mid-2013 and the auctions completed by the end of 2014 [20]. Full article.
  • October 04, 2012: Chairman Genachowski said that the FCC will exceed its 300 MHz target for freeing up spectrum, a target the commission set in  the National Broadban Plan [21]. Full article.
  • November 13, 2012: An anonymous group of broadcasters interested in selling their TV spectrum in the incentive auction created the Expanding Opportunities for Broadcasters Coalition and tapped former Fox and Disney lobbyist Preston Padden to lead their efforts before the FCC as the commission writes rules for the auction [22]. Full article.
  • December 03, 2012: FCC officials spelled out some financial options in a PricewaterhouseCoopers LLP webcast, urging listeners to file comments as the commission works to write rules for the auction. The deadline for comments on its Notice of Proposed Rulemaking was extended to Jan. 25, with reply comments due March 26 [23]. Full article.

With the auction yet to occur, there is more news to come. To stay updated, check out the FCC’s official website.



[1] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.28.












[13] [14]

[15] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.29.

[16] Howard J. Blumenthal and Oliver R. Goodenough. “This Business of Television: The Stadard Guide to the Television Industry,” 3rd Ed., pg.30




[20] FCC_Wants_Broadcast_Spectrum_Auctioned_by_2014.php





Regulation of Distribution

by Carli Blau

This new broadband era that we have now entered is creating a bit of a struggle for the government as it is trying to keep up. While the Internet is currently a neutral space and lacking in regulation, companies are beginning to realize that there may need to be some regulation. The government is also looking to regulate the net. This is called Net Neutrality. It is going to be a very interesting topic in the months to come because large cable companies are pushing for the net to be split, while the FCC and other small internet service providers want to keep the net neutral.  With the Internet being such a big part of distribution of TV, it will eventually have to be regulated somehow, the question to think about is how we are going to do it?

The Senate’s Commerce Committee recently held a hearing to discuss the future of TV and where it thinks it is going. According to the Senate’s Commerce Committee, TV is going to be found in deregulation. “The proposed act deals primarily with deregulating the broadcast industry to eliminate some required coverage mandates and to allow broadcasters to negotiate retransmission rates with pay TV providers just like cable programmers such as ESPN or AMC do.”

The biggest issue of this hearing was the relationship between TV and broadband and how intertwined the relationship is at this point in time. With consumers able to get whatever they want through selection of broadband products, distribution companies, etc., they are not going to settle for paying more than they have to. Therefore, the fight is now going to be all about who has the most power in regards to customers, the broadcast industry or online companies that are planning to distribute television programming all over the internet. [Gigaom]

The scary thing that is going on right here, right now is that TV used to be the biggest storyteller, and while it still may be, it is the Internet that has become the biggest platform for all services. Rather than television being the go-to place for information, the internet is now the place for everything, including TV which has now become just another part of it all. This is going to give the upper hand to online TV distributors, but will definitely challenge and test the relationship between TV distributors and their customers, along with the relationship between customers and the actual TV screen.

TMO News

Executives from News Corporation, NBCUniversal, the Walt Disney Company and the National Association of Broadcasters met with some officials from the FCC because they are not too fond of the proposed public interest rules that would make the amount of money that political candidates are paying for TV advertising. Currently there are rules in questions that would mandate that these big TV networks share their details about politial programming, including how much the candidates are paying to run advertising. The networks are collectively saying that, “[C]ompetitors in the market and commercial advertisers may anonymously glean highly sensitive pricing data, which, by law, will represent the lowest rates charged by the station to its most favored commercial advertisers,” adding that they were “[O]pen to discussing other options for keeping sensitive rate information out of the online public file.” [TVNewser]

Another interesting point here is that other distributors aside from television are not mandated to disclose their political information, yet these networks may have to. Despite what the networks had to say however, the FCC mandated the posting of political files online. If everything is moving online, it is only fair that political files be put online for the pubic to see and have access too. This is where the relationship between broadcast and television is becoming so intertwined that it is causing more problems than good for regulators, since they are not quite sure how to handle the relationship just yet.[TVNewsCheck]

[scribd id=81069955 key=key-1z75pjzdm5ckse6i8083 mode=list]

The FCC is dealing with a lot concerning the new relationship between television and the internet, it seems as though this relationship has caused quite an uproar as many people are not quite sure of how to handle it. The F.C.C. bars the use of airwaves that were originally reserved for satellite-telephone transmissions because it says it will interfere with GPS technology. The airspace is currently being inhabited by the GPS devices, and thus far, there is no way to efficiently deal with potential interference. [NYTimes]

The problem we’re going to see more of in the near future is the regulation of space, airwaves and internet servie especially with everything becoming so intertwined with one another. Everyone is concerned with how to please the customers and give them what they want, but if we continue to see regulations, companies are going to be faced with problems.

Copyright 2009-2011 Rights Reserved.

According to, the NAB asked the FCC to “liberalize local media ownership limits and not to impose new restrictions on contractual arrangements under which stations in a market share resources or operate in tandem.”   The NAB argues that the FCC should allow common ownership of two TV stations in more markets, particularly because of the mergers that have occurred, and different distribution platforms. “The NAB contended that such arrangements should not be restricted. They “do not threaten licensee control over operations and programming decisions, which are the core principles underlying the FCC’s attribution policies,” it said. “In fact, sharing arrangements advance the FCC’s localism and diversity goals by facilitating the provision of local news and other programming.”

© 2012 DD&M Inc. All rights Reserved.

Verizon recently announced that it is going to sell portions of its spectrum in a number of major markets for its purchase of spectrum but there is a debate concerning whether or not the sale is a plot for approval of cable deals. People are assuming that they decided to sell portions of the spectrum because of issues with the Federal Communications Commission. This also brings light to the current question of whether or not there is actually a spectrum crisis. Verizon’s deals for spectrum “included joint marketing agreements with SpectrumCo (an entity owned by Comcast, Time Warner Cable and Bright House Networks), Cox and Leap Wireless.  Those deals are currently under review by the FCC and the Department of Justice and was the subject of a recent hearing before the Senate Antitrust Subcommittee. ” [AdWeek]

The FCC took a big step recently by shifting a large piece of the spectrum from TV broadcast to wireless broadband. “It unanimously approved rules allowing TV stations to share channels while retaining must-carry and other rights that come with owning a full channel.” The FCC made this decision with the hopes that weaker stations will be encouraged to double up on their channels, turn over their spectrum space to the FCC and participate in other “incentive” auctions. One of these auctions is the commission said it would recover up to 120 MHz or 40% of all TV spectrum. Interestingly enough, many broadcasters are not interested in giving up spectrum. [TVNewsCheck]

Things to keep an eye on in months to come is the spectrum scarcity crisis, does it exist and what are the FCC and other broadcast distributors and networks going to do about it, we’ll just have to wait and see.