Cable TV standoffs threaten viewing costs, choices

Mon, 01/04/2010 - 7:15am
Dave Carpenter, AP Business Writer

CHICAGO (AP) – Many questions remain for cable TV viewers nationwide, even after Fox and Time Warner Cable settled their noisy spat with a New Year's Day agreement.

The deal was good news for more than 6 million Time Warner customers in the short term: College bowl and National Football League games, "American Idol" and a host of other popular Fox programs in New York, Los Angeles, Dallas, Orlando and other markets are appearing on their screens as usual.

Sharri Genens of Redondo Beach, Calif., was among the Time Warner customers who were relieved. She said she was extremely upset when she heard she might lose Fox.

"I would have dropped cable entirely if they'd done that," said Genens, 39. "I would have just gone to somebody else to pay more, done whatever I needed to do to get my shows" – including football.

Fox had threatened to force Time Warner Cable and Bright House Networks to drop its signal from 14 of its TV stations and a half-dozen of its cable channels if Time Warner didn't increase payments to Fox in a contract that took effect Friday. The deal affects close to half of its customers. Time Warner is the nation's second-largest cable provider after Comcast Corp.

But the companies are not talking about how the agreement will affect customers' bills. And the mood among cable providers, broadcasters and other content producers has not improved.

A less amicable ending in a separate programming dispute showed the downside of playing hardball.

Cablevision Systems Corp. customers in New York, New Jersey and Connecticut reacted angrily in more than 100 posts Friday and Saturday on the media and entertainment news site after about 3.1 million subscribers lost access Friday to HGTV and Food Network.

Comments accused Cablevision and Scripps Networks Interactive Inc. – but mostly Cablevision – of greed and arrogance when they failed to reach agreement over a fee increase Scripps demanded.

Many of those who posted said they were switching to competitors or satellite or going online. Some were particularly upset at the prospect of missing a two-hour “Iron Chef” episode set for 8 p.m. EST Sunday that features Michelle Obama and the White House chef.

Neither Cablevision nor Scripps responded immediately Saturday to questions about the status of talks.

The spat between Cablevision and Scripps heated up Sunday, with cable TV viewers in New York, New Jersey and Connecticut still caught in the crossfire.

And representatives of Time Warner and Fox remained mum about the terms of their new deal, declining requests to comment.

Fox had demanded $1 per cable subscriber per month for programming it used to give away, saying it no longer can afford to offer programming free when cable channels earn subscriber fees.

Until the 1990s, advertising and fees from local affiliates supported all four of the nation's main broadcast networks – ABC, NBC, CBS and Fox.

But advertising income has plunged, and by 2008, cable-only producers took in almost 39 percent of TV ad revenue, which broadcasters used to have to themselves. So the networks are increasingly dependent on the license fees they began charging cable providers in 1994.

Fox didn't get all it wanted, but Chase Carey, chief operating officer at News Corp., said Friday the agreement "recognizes the value of our programming."

Time Warner continued to carry Food Network and Great American Country as its talks with Scripps went on.

And cable company Mediacom Communications Corp. will keep carrying Fox and CBS signals from Sinclair Broadcasting Group Inc. stations in markets such as Des Moines and Cedar Rapids, Iowa, in a temporary deal that extends to next Friday.

Telephone messages left for Sinclair and Mediacom on Saturday were not immediately returned.

The standoffs refocused attention on the law that let broadcasters start charging fees to cable and satellite operators for their programs.

Advocacy groups and some politicians oppose the 1994 law because it lets both cable operators and content producers pass along to consumers the cost of programs they could watch for free when broadcast dominated the television market.

"I think there needs to be some sort of government oversight over the cable industry," Mindy Spatt, spokeswoman for The Utility Reform Network, a San Francisco consumer advocacy group, said Saturday. "There's a danger for consumers that the price is just going to keep rising with no end in sight."

Sen. John Kerry (D-Mass.) said that broadcasters and cable operators should be able to reach terms without "consumers being put in the cross hairs."

The prospect of lawmakers stepping in to take action ultimately may have persuaded Fox to settle, according to Time Warner Cable.

"Engagement by key policy makers . . . focused on protecting consumers was instrumental in preventing unnecessary consumer disruption," said company spokeswoman Maureen Huff.

– AP Business Writer Ryan Nakashima in Los Angeles contributed to this story

More Broadband Direct 1/04/10:
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•  All signs point to Nexus One tomorrow
•  Comcast SportsNet accused of abusing power
•  ACA agitates for STB relief
•  Comcast expands D3 reach in Calif.
•  Comcast settles data discrimination lawsuit
•  NCTA updates CableCard scorecard
•  Videotron wireless on track - mostly
•  Cable TV standoffs threaten viewing costs, choices
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•  Broadband Briefs for 01/04/10



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