It is highly unlikely that the FCC would finish its review in time to have any material impact on the outcome of the current dispute between LIN Media and DISH Network. The typical retransmission stand-off lasts under three weeks because contracts tend to expire during important TV events. In this instance, the dispute comes shortly before the wildly-popular NCAA March Madness tournament college basketball tournament is set to start. DISH Network and LIN Media, which owns six local CBS stations in mid size markets, will be under pressure to settle their differences before the regional play-offs on March 24. In the meantime, each side will attempt to use the tournament 'card' to its advantage, with both parties hoping the other side would soften its stand because of the consumer outcry.

There is no guarantee, however, that this dispute will be resolved within the three-week timeframe. DISH Network, which has been emboldened by the little impact its recent tussles with programmers had on its stock price or bottom-line, may hold out for as long as it deems necessary to achieve its long term objectives. The company views escalating programming costs as a threat to its business model which is built around providing affordable TV packages to low-end consumers. While DISH executives are not holding their breath for an FCC intervention in this particular instance, the current standoff will reinforce the signal the company has been sending to programmers that it will not shy away from a fight. The satellite operator may be also hoping the controversy would push the FCC and Congress to overhaul what DISH and other operators believe is an outdated retransmission consent regulatory framework that gives broadcasters an unfair advantage.

Over the past year, DISH has been involved in at least six public carriage disputes with some of the biggest players in the content industry. In May 2010, the operator came close to dropping NBCU's The Weather Channel before the two sides reached a multi-year agreement. A month later, DISH permanently dropped the HD feeds of four cable networks owned by Disney rather than pay an HD premium. In July, DISH refused to renew its contract with Cablevision's Fuse Network choosing to replace it with Viacom's Palladia. In October, FX, National Geographic, and 19 regional sports networks went dark on DISH network in a carriage fee stand-off with News Corporation that lasted four weeks. Simultaneously, DISH Network let its contract expire with Cablevision's regional sports network MSG and removed it permanently from the line-up. Comcast SportNet California remained dark on DISH for two months until the two sides came to terms last February. The totality of these disputes has sent a clear signal that DISH would not shy away from protracted carriage battles in its quest to keep programming expenses in check.

LIN Media, for its part, may perceive itself to be embroiled in a fight for survival. Independent station groups are coming under increasing pressure from the Big Four networks to pay 'program fees' as high as 50 cents per subscriber per month, which is more than most stations get in retransmission fees from TV operators. Therefore, unless station groups are able to secure significant retransmission fee increases from operators in this round of negotiations, program fees will have to come out of advertising revenues. Stations that fail to provide these fees risk having their affiliations yanked, which would be the broadcast TV equivalent of a death sentence. Given the seriousness of this threat, LIN Media may feel especially incentivized to hold its ground in the current stand-off with DISH Network because of its potential impact on future negotiations with other operators.

It is against this contentious backdrop that the retransmission consent review process is taking place. The FCC has gone to great lengths in its public statements to dispel any fears that it intends to change the current dynamics of the marketplace. The NPRM starts with an acknowledgement from the regulatory agency that it does not have the statutory authority to impose two remedies that have been championed by operators: 'binding arbitration' and 'interim carriage' (keeping signals on during impasses). Local stations have every reason to rejoice in having these two remedies nixed from the onset of the review process, as they would have seriously deflated their negotiating position vis-à-vis operators.

A closer look at the rule making proposal suggests, however, that the operators may be about to get some limited, yet meaningful, regulatory relief from the FCC. Of particular importance is the regulatory agency's new-found willingness to revise its 'network non-duplication' and 'syndication exclusivity' rules. 'Network non-duplication' prohibits operators from importing the network feed from stations in other markets or the network itself in the case of a blackout due to a standoff with the local affiliates. 'Syndication exclusivity' prohibits operators from importing the same syndicated content from an out-of-market station. If the Commission does in fact eliminate these two rules, operators would be able to negotiate alternative access to network programming and syndicated content, essentially eroding local stations' negotiating position.

In practice, these rules are beginning to lose their relevance in the marketplace as they come under assault from operators. Time Warner Cable (TWC), for example, negotiated last year a deal with FOX Network that allows the operator to import its network feed temporarily if negotiations with one of the local affiliates reaches an impasse. In another instance, TWC imported the local station signal from a market in Pennsylvania during a stand-off with the owners of a station in up state New York. By eliminating network non-duplication and syndication exclusivity, the FCC would simply legitimatise what is becoming a more common practice.

While the proposed rule changes may strengthen the operators' negotiating position with independent station groups, it is safe to say that they would have no impact on the tenor of negotiations between operators and the broadcast networks themselves over the signals of their Owned and Operated (O&Os) stations. These networks and their stations are owned by major media companies whose sheer size and diversity of programming assets give them immunity against such limited reform efforts. Furthermore, these O&O stations are located in the top media markets where competition among operators is the strongest, giving them additional leverage in retransmission negotiations. IHS Screen Digest estimates that the Big Four broadcast networks will collect a billion dollars in retransmission revenue for their O&O stations by 2013.

With so many players involved and the stakes so high, the retransmission consent review will in likelihood be a long and complex undertaking. The final outcome of the process will not only depend on the balance of power among these market players but also on the balance of power within the FCC between the Democratic majority and their Republican counterparts. In the meantime, DISH Network and LIN Media will have to work out their differences the old-fashioned way, through bare-knuckle fighting and customer ransoming.