Broadcast television still looks to be the winner after pay-TV outlets took their complaints about fees to carry broadcasters' free-to-air content to the U.S. Federal Communications Commission.
Last week's FCC proposals make some inroads to help consumers when these disputes threaten to cause blackouts of major sporting events and popular programs.
But industry experts say the rulemaking will not make a significant dent in broadcasters' leverage during negotiations with cable and satellite television providers.
A proposal that consumers be notified when a retransmission agreement is expiring even looks like a recipe to drive viewers to switch to a provider who has settled with broadcasters.
"In retrans deals, broadcasters are always mindful of how regulators will react, but with the FCC's recent ruling they may feel a bit freer to push hard for the best deal possible," said MF Global analyst Paul Gallant.
If current retransmission rules were changed so that pay TV outlets could carry programing from broadcasters outside the consumer's local area, the balance of power might shift markedly.
"You would suddenly have substitutes available for that broadcast signal," said Bernstein Research senior analyst Craig Moffett.
Still, the outlook for such a rule change looks poor according to some industry experts, with Moffett describing any optimism from pay TV providers on this front as "wishful thinking."
While the retransmission rule battle is just beginning, companies like News Corp, CBS Corp, Sinclair Broadcast Group Inc and LIN TV Corp will likely maintain their upper hand in negotiations over program carriage fees.
The FCC is seen as unlikely to antagonize the broadcasters because it needs them to agree to give up some of their airwaves in profit-sharing government auctions that would help feed the need for wireless spectrum.
Those auctions need authorizing legislation, and broadcasters have considerable support among lawmakers because of their coverage of home-town politics.
"Any sort of legislation that the broadcast industry does not want will face an uphill battle," said Jeffrey Silva, an analyst with Medley Global Advisors.
SUBSCRIBER LOSSES
Cable operators stepped up their calls for reform last year after News Corp pulled its local Fox stations and sister cable networks from Cablevision Systems Corp subscribers when the companies failed to reach a deal over a price rise in programing
fees.
More than 3 million New York area homes in October saw a 15-day blackout of local Fox news, the opening of baseball's World Series and popular shows like "House," "Glee" and "The Simpsons."
Cablevision attributed significant subscriber losses in its fourth quarter to this retransmission dispute.
The FCC largely stays out of fights over broadcast program carriage, but after the Fox-Cablevision spat the agency pledged to explore actions to protect customers from blackouts.
Still, the FCC has stressed it has limited authority over retransmission consent, the negotiations over how much pay TV providers like Time Warner Cable and Dish Network Corp should cough up for the right to carry the free-to-air signals of ABC, CBS, Fox and NBC networks, and their affiliates.
The agency said it does not have the authority to require broadcasters to provide their signals to pay TV providers and cannot order negotiating parties into binding arbitration.
The law requires negotiations be conducted in good faith, and the FCC has previously stipulated that asking for more money does not constitute bad faith.
Still, the American Television Alliance, the leading group calling for reform, maintains that the FCC has more authority in this area, and the agency did request comment on this point.
The alliance, which represents pay TV providers, independent programmers, and consumer groups, pointed to LIN Media pulling 27 stations in 17 markets from Dish Network on Saturday after the companies failed to reach a retransmission agreement.
"These bullying tactics will continue until the FCC reforms outdated rules and balances the scales that today give broadcasters numerous advantages," the group said.
Mike Heimowitz, the group's spokesman, called the FCC's proposal an open book and said they are hoping to see real changes as the rulemaking progresses.
"They've opened the door to making some changes that can make a real difference," Heimowitz said.