New FCC Regulations: Good for Consumers, Bad for Cable Providers

New Federal Communication Commission rules have major cable providers up in arms, but could be beneficial for consumers.

The FCC has issued a "standstill," which rules that cable providers can no longer pull channels off the air in contract disputes or other issues. In the past when a cable provider couldn't come to an agreement with a network it could pull the entire network off of the air, leaving consumers blowing in the wind.

In the past viewers have missed major sporting events, award shows such as the Academy Awards, as well as other must-watch television due to contract disputes. This new measure by the FCC should prevent this from happening in the future.

The cable industry didn't take kindly to the move with some claiming that more government intervention isn't a good thing.

The moves show a "disturbing lack of appreciation of the potential impact of government intervention on consumers or the marketplace," Michael Powell, former FCC chairman and current head of National Cable & Telecommunications Assn., told the Los Angeles Times.

The move is meant to allow small, independent channels to get fair dealings from major cable providers. In the past channels, such as the NFL Network, had to petition the FCC to get fair placement on a cable provider's listing of channels. With NFL Network, it was given a high channel number spot and only offered to sports premium package subscribers by Comcast, in part, some allege, due to Comcast owning competing sports channels.

"This will promote diversity in cable TV offerings by insuring that independent cable channels have a shot at getting carriage on large cable systems" Media Access Project policy director Andrew Jay Schwartzman told the newspaper.

Cable channels can now also petition the FCC for distribution if they can show that they are being unfairly discriminated by a cable provider.

One question to ponder is whether these new restrictions will lead to a cable price hike for consumers. No cable provider has announced one as of yet, but it could come up if they are leveraged against in negotiations due to these new rules.