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With World Series looming, Cablevision, Fox hurl 'bad faith' accusations

Tue, 10/26/2010 - 8:40am
Mike Robuck

With the first pitch of the World Series slated for tomorrow night, Cablevision's 3 million subscribers have their collective fingers crossed that the cable operator and Fox Networks will have ended their standoff by then.

Yesterday, Cablevision sent a letter to the Federal Communications Commission that said, in part, that Fox hasn't been negotiating in "good faith" on a new retransmission agreement. Cablevision asked the federal regulators to restore the three Fox Networks stations to its lineup.

Fox, which is owned by News Corp., pulled the signals from Cablevision subscribers in the tri-state New York metropolitan area on Oct. 16. The channels were pulled from Fox 5 and My9.

"The FCC filing clearly demonstrates that News Corp. has acted in bad faith and outlines the FCC's authority to order binding arbitration and immediately end the Fox blackout of Cablevision customers," Charles Schueler, Cablevision's executive vice president of communications, said. "News Corp. never engaged in real negotiations; they only made a 'take it or leave it' proposal for Fox 5, and they timed the Fox blackout to leverage major national sporting events to force Cablevision to accept unreasonable demands."

Cablevision said in its filing that Fox is asking for a carriage agreement that would increase the amount from the previous $70 million to more than $150 million.

Cablevision also claimed that Fox is using a "take it or leave it" approach to a deal for Fox 5, and that it deliberately timed the blackouts to coincide with sporting events such as the World Series and New York Giants' games. Cablevision viewers have also missed out on episodes of "Glee" and "House" during the blackout.

Cablevision wasn't buying News Corp.'s claim that it can't show any flexibility in its demands for Fox 5 because it is bound by a "Most Favored Nation" (MFN) clause based on a rate it claims Time Warner Cable agreed to pay in a broader national agreement. "This is a self-imposed limitation that is a clear violation of the FCC's good faith rules," Cablevision wrote.

Lastly, Cablevision wrote that News Corp. has abused the power it has achieved through special "one of its kind" FCC waivers that allow it to own multiple government broadcast licenses and newspapers in the New York market.

"News Corp. is attempting to leverage its unprecedented government-enabled media consolidation to force Cablevision to accept unreasonable fee demands," Cablevision said in its FCC filing.

On Friday, the FCC's Media Bureau sent letters to Cablevision and News Corp. requiring both companies to respond Monday with information in regard to how they were satisfying the "good faith" requirements of the Commission's retransmission consent rules. The letter asked for detailed accounts of the negotiations involving Fox 5 and My9 and the efforts by the companies to end the current stalemate.

In its FCC filing, Fox and News Corp. outlined their efforts to come to terms with Cablevision and refuted the cable operator's claims of a "take it or leave it" approach, as well as the $150 million in carriage fees. The two also said Cablevision wasn't negotiating in good faith.

"From the genesis of our talks with Cablevision, Fox has negotiated in good faith," according to a statement by Fox and News Corp. "We have never made any 'take it or leave it' demands, nor are we asking for $150 million in fees. For Cablevision to still be making those claims is yet another example of their ploy to secure an advantage through government intervention. Fox once again calls on Cablevision to stop punishing their subscribers in service of a cynical political strategy and resume constructive negotiations."

Fox has cited the $3.40 a month per subscriber that Cablevision charges to carry two of the regional sports networks that it owns, MSG and MSG Plus, as the rationale for charging $5 or $6 per month for its stations.

Cablevision subscribers were able to watch the New York Giants thump the Dallas Cowboys last night on ESPN, but missing the first game of the World Series could be tantamount to crossing the Rubicon for some Cablevision customers.
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