Did you catch the Packers-Cowboys game Thursday night? According to USA Today, less than 40 percent of the United States was able to sit at home and watch asthe Cowboys edged out the Packers 37-27. The widely anticipated competition between the two 10-1 teams aired locally, but for those not living in Green Bay, Milwaukee,or Dallas/Fort Worth, the only place to see the game was on the NFL Network, a fairly recent cable channel that reportedly, "provides about 24 hours per year of live NFL football and about 8,736 hours of filler."Unfortunately, the NFL Network isn't available on many cable systems. Some cable providers, such as Comcast, only offer the network as part of its sports tier, despite the NFL's pleas to be included as basic cable. The two major satellite companies offer the channel in their basic package, and the NFL has mounted a campaign urging viewers to dump its cable companies for an alternative that carries the NFL Network. Not surprisingly, both the NFL and cable industry are pointing their fingers at the other. The NFL refuses to allow its channel to be offered as part of a sports tier, and the cable companies won't allow them to join basic cable. In Wednesday's Milwaukee Journal Sentinel, both Steven M. Bornstein (the CEO for the NFL Network) and Jack Herbert (the president of Time Warner Cable Wisconsin), are featured in opposing editorials. Bornstein writes:
Big Cable is keeping NFL Network off its broad and affordable programming packages so most NFL fans will miss the game and all the coverage leading to it.Herbert:
It is the NFL that decides how its games are made available on broadcast and cable. The NFL now has stripped out eight games in an effort to extract more revenue from its fans. In doing so, it also has pulled these games away from fans who cannot or choose not to pay for cable or satellite service. This is not about cable denying fans' games; this is exactly about the NFL trying to generate as much money as possible by creating its own NFL Network.All the companies involved are trying to maximize their profits. In this case, the two parties have incompatible economic strategies, and it is the fans who have suffered, but neither the NFL nor the cable companies are in the business of satisfying viewers. Their only goal is to make as much money as possible (that's what corporations do); it just so happens that it's usually a good business decision to give the customer what he or she wants. It's difficult for me to determine who's to blame here. The cable industry has certainly played a few bad cards over the years, and I'd be surprised to learn that the NFL has a spotless track record. Even still, the NFL does seem to be trying to work with the cable industry to find a solution.
We are in favor of letting the free market work. For the most part, we believe government should stay out of commercial disputes. But when cable companies can use their power to block fans from seeing their teams unless they pay extra, the market isn't working... We are not asking the government to take sides in this dispute, but we do believe that a neutral third-party arbitrator should be able to step in and bring about an agreement.On the other hand, Herbert writes:
There is a bill in Wisconsin that seeks to establish arbitration rights for programmers that have carriage disputes with cable operators. A state bill like this is pre-empted by federal law, and it violates the commerce clause and the Constitution's First and Fifth Amendments. Arbitration also would be bad for video customers. Arbitration could increase prices, and it sets a bad precedent. Why not arbitrate all commercial disputes? If you cannot agree on the price of a new car with the car dealership, why not permit arbitration so that you don't have to bother with negotiations? Or if you own a product and you want it sold in a specific aisle and shelf in a grocery store, why not demand arbitration rather than negotiate with the store owner? Better yet, why not go into arbitration over the price of a seat to a professional football game?I'm unsure whether such a state arbitration policy would actually go against Federal law. It does seem like a neutral party may have better success brokering a deal between the cable companies and the NFL though, and Herbert's comparison to personal shopping situations seems dismissive and underlines the rigid stance that the cable companies have taken in this dispute.