The FCC has sided with independent pay TV operator Armstrong Utilities in a pricing dispute over the Root Sports Pittsburgh regional sports network (RSN).
With a 4-1 vote, the Federal Communications Commission upheld a 2011 Media Bureau arbitration decision. That ruling determined that Armstrong's final bid in a carriage dispute over the channel was closer to market value than the final demand put forth by the RSN's operator, DirecTV (NASDAQ: DTV) Sports Net Pittsburgh (DSNP).
Root Sports is the pay TV home of Major League Baseball's Pittsburgh Pirates and the National Hockey League's Pittsburgh Penguins.
With carriage fee impasses over pricey regional sports networks dragging on in major cities like Los Angeles and Houston, how was Armstrong able to obtain such an arbitration ruling?
You have to go back to 2009, when News Corp. transferred control of the DirecTV Group to Liberty Media through an exchange of stock. As a condition of regulatory approval, the FCC mandated that future carriage disputes be decided by "baseball-style" arbitration.
According to law firm Proskauer, which mediated the arbitration process on the part of Armstrong, the cable company is the first to prevail in such an RSN-related arbitration process.
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