Could the FCC soon have the ability to stop a large amount of regional sports network blackouts? Regional Sports Network (RSN) prices are out of control. Time Warner Cable wants every cable subscriber in Los Angeles to pay $3.84 in order to watch JUST the Los Angeles Dodgers. Regional networks with multiple teams games attached to them are just as expensive. CSN Bay Area demands $3.53 per subscriber, CSN Philadelphia wants $3.90 per subscriber and CSN Houston wanted $3.40 per subscriber before they landed into bankruptcy. The list goes on.
Now, the FCC is being tested about whether they can determine a decision in an baseball-type arbitration hearing between a pay television distributor and a regional sports network. Baseball arbitration means that if the parties can’t agree on terms for a license deal, they go to arbitration where each side presents their best offer and an arbitrator choose which closely approximates the fair market value of the deal.
Previously in mega-mergers, the FCC has required arbitration to make certain determinations such as News Corp.'s purchase of DirecTV, Liberty Media's purchase of DirecTV and Comcast's purchase of NBCUniversal.
As The Hollywood Reporter notes, in 2011, an arbitrator found that Armstrong's final offer was closer to "fair market" than DirectTV Sports Net Pittsburgh's own offer. The ruling was then affirmed in a 4-1 vote by the FCC Media Bureau.
Once DirecTV lost the appeal to the FCC, they challenged the FCC’s authority to act in this situation. The FCC noted in their appeal decision that they did have the authority to act due to the conditions
imposed at the time of Liberty Media's acquisition of DirecTV.