Cablevision Makes New Offer to Fox

The Wall Street Journal

 

Cablevision Systems Corp., attempting to end a TV-station blackout over a contract dispute, proposed paying News Corp. the same rate that Time Warner Cable Inc. pays the media giant for local Fox affiliates in New York and Philadelphia.

News Corp., which owns Fox television networks, rejected the offer, calling it "yet another in a long line of publicity stunts" by Cablevision.

The programming blackout, now in its 12th day, is threatening to deprive 3 million households in the New York Metropolitan region of the World Series Wednesday night—a prospect that would lead to more public outcry against both companies.

In a news release, Cablevision said that for one year it would pay the rate Fox charges Time Warner Cable for carrying the local affiliates in New York and Philadelphia.

"This is higher than the rate we pay any other New York broadcast station," Cablevision said. "This solution is in the best interest of not only baseball fans but of all Cablevision customers and Fox viewers."

News Corp. said it remains committed to negotiating a fair deal, but Cablevision's "incomplete proposal is not acceptable." The media giant added that "Cablevision is seeking a discounted 'package rate' without buying the entire package."

News Corp. said it is willing to negotiate a deal "based on an entire suite of channels" under the terms it reached with Time Warner Cable and other providers, or a stand-alone agreement for three local broadcast Fox affiliates.

The blackout for Cablevision customers included the main Fox station in the New York area, as well as a smaller station, the Fox station in Philadelphia and other cable networks owned by News Corp., such as Nat Geo Wild and Fox Deportes, a Spanish-language sports service. Fox News is unaffected because it is part of a separate contract.

Cablevision responded to Fox's rejection by renewing its plea for intervention by the Federal Communications Commission.

"It is now clear beyond a shadow of a doubt that News Corp. is operating in bad faith," Cablevision spokesman Charles Schueler said. "We call on the FCC to intervene immediately to restore the Fox signals to Cablevision's 3 million homes and order News Corp. to agree to binding arbitration to resolve this conflict."

Cablevision has said it already pays News Corp. more than $70 million a year for its channels and that News Corp. is demanding more than $150 million a year for the same programming--a claim that News Corp. said is "simply not true."

Cablevision also has said it has agreements with every other major broadcast station, including CBS, NBC, ABC and Univision, but News Corp. is asking for more in fees for the two New York stations—FOX 5 and My9—than Cablevision pays for all of the other broadcast stations combined.

By offering to match the rate paid by Time Warner Cable, which reached a multiyear agreement with News Corp. early this year in a dispute that avoided programming blackouts, Cablevision appears to be moving off its previous negotiating stance. Still, the extent of any concessions is unclear, because most major distribution deals between media companies and distributors like this run for several years and include guaranteed fee increases over time among other provisions.

A Time Warner Cable spokesman declined to comment on that company's deal with News Corp. and the value of Cablevision's offer.

News Corp. is believed to be under pressure to reach a deal with Cablevision on at least the same terms as the one with Time Warner Cable. If it is unable to do so, News Corp. likely would have to make concessions to Time Warner Cable, based on that deal's terms.

Last year, Cablevision delayed by one year a contract negotiation with News Corp. for its Fox stations that could have affected broadcasts of a World Series eventually won the New York Yankees, a home team in Cablevision's main market. The delay allowed Time Warner Cable to negotiate its deal with News Corp. first, setting a new standard for payments for its broadcast signals. This year, the Yankees didn't make the World Series, taking some pressure off Cablevision.

The resulting dispute has left about 3 million homes, largely in the New York area, without access to their local Fox affiliate and major sports events, such as National Football League games and Major League Baseball's National League Championship Series last week. Fox is broadcasting the first game of the World Series between the Texas Rangers and San Francisco Giants on Wednesday.

Fox-Cablevision Dispute threatens MLB Broadcasts

The Associated Press

News Corp.'s Fox pulled its channels off Cablevision early Saturday after the companies' programming deal expired and negotiations for a new one stalled, threatening broadcasts of baseball playoffs for some 3 million Cablevision subscribers in New York and Philadelphia.

The blackout affects Fox 5 and My9 in New York and Fox29 in Philadelphia. Subscribers also lose access to cable channels Fox Business Network, NatGeo Wild and Fox Deportes.

The channels went dark when the programming deal expired just after midnight Friday. Such deals spell out how much a cable TV system pays the broadcaster to carry its signals over the cable lineup.

The impasse means the subscribers, mostly in the New York area but also in Philadelphia, could lose access to Game 1 of Major League Baseball's National League Championship Series, when the Phillies take the field against the Giants on Saturday night.

Cablevision called on News Corp. to put Fox5 and My9 back on Cablevision immediately and submit to binding arbitration under a neutral third party.

"News Corp.'s decision to remove Fox programming from 3 million Cablevision households is a black eye for broadcast television in America," Cablevision spokesman Charles Schueler said.

Fox released a statement blaming Cablevision for the impasse.

"In an effort to avoid this very situation, we started this process in May and made numerous reasonable proposals to Cablevision," said Mike Hopkins, president of Fox Networks Affiliate Sales and Marketing. "However, we remain far apart and Cablevision has made it clear that they do not share our view regarding the value of Fox's networks."

In separate fee disputes this year, Cablevision customers have experienced brief blackouts of The Walt Disney Co.'s ABC broadcast signal and Scripps Networks Interactive Inc.'s Food Network and HGTV. Subscribers missed the first 15 minutes of the Oscars in the ABC dispute.

Cablevision Systems Corp. has said News Corp.'s Fox is making "outrageous fee demands" for the right to carry the signals of the three cable channels and three TV stations.

Cablevision says it pays $70 million a year for access to 12 Fox channels, including those in dispute, and that News Corp. is now asking for more than $150 million a year for the same programming. It said Thursday that it is willing to submit to binding arbitration and called on Fox not to pull the plug.

Fox rejected the call for arbitration, saying the process would "reward Cablevision for refusing to negotiate fairly."

"Direct business-to-business negotiation is the only way to resolve this issue," it said in a statement.

While Fox didn't dispute Cablevision's claims, it called Cablevision "hypocritical" because it pays more for two of its sister company channels, MSG and MSG Plus, than it does for all 12 Fox channels. MSG and MSG Plus are owned by Madison Square Garden Inc., which like Cablevision is controlled by the Dolan family.

Lawmakers have begun to speak up on the issue, including Rep. Steve Israel, D-N.Y., and Rep. Peter King, R-N.Y., who called for arbitration so viewers wouldn't have their TV programming disrupted.

Israel said in a statement Friday that he had asked the Federal Communications Commission to intervene in the dispute.

The FCC encouraged the two parties to agree to binding arbitration without suspending service and did not specify a mediator, according to Jack Pratt, a spokesman for the Long Island congressman.

Sen. Frank Lautenberg, D-N.J., had urged both sides to extend negotiations.

"New Jersey consumers do not deserve to be treated as pawns in this dispute," he said in a statement.

Rebecca Arbogast, a managing director at brokerage Stifel Nicolaus, said News Corp. and other broadcast company owners risk political intervention if they keep pushing carriage deals to the brink.

"The more that programming disputes escalate and signals get pulled ... the more pressure we believe there will be on the (Federal Communications Commission) and Congress to do something to prevent such consumer disruptions," she wrote in a research note Thursday.

In a separate dispute with satellite TV company Dish Network Corp., Fox cut access on Oct. 1 to 19 regional sports networks, FX and the National Geographic Channel for some 14.3 million Dish subscribers. That fight foreshadows more tough negotiations, as the deal for Fox broadcast signals on Dish expires Oct. 31.

Cablevision Customers hit by E-mail Glitch

The Wall Street Journal

 

Cablevision Systems Corp. said it is having technical problems that are causing some of its customers to have trouble accessing their emails.

"Cablevision is experiencing technical issues that have resulted in email delays and email access issues for some customers," the Bethpage, N.Y., company said in a statement in response to an inquiry from The Wall Street Journal. "We have located the problem and expect to resolve the matter as quickly as possible."

Some Cablevision customers contacted by The Journal said that since Thursday they haven't been able to access their email accounts from Cablevision's Optimum service. These Cablevision customers said their cable-television service and access to the Web appear unaffected.

As of March 31, there were more than 2.6 million customers for Cablevision's Optimum Online high-speed Internet service. It wasn't immediately clear how many of the subscribers were experiencing email problems.

"We apologize for any inconvenience to our customers, and we will update this announcement as more information becomes available," Cablevision said in its statement.

Verizon Seeks to Ban Cablevision Set-Top Boxes

AP

As competition for video subscribers heats up in the New York City area, Verizon Communications Inc. has taken a swipe at cable TV rival Cablevision Systems Corp., accusing it of infringing on several Verizon digital set-top box patents.

Verizon filed a complaint Tuesday with the U.S. International Trade Commission seeking to ban imports of certain digital set-top boxes used by Cablevision. Verizon accuses the cable operator of violating five of its patents, including one on programmable set-top boxes.

Verizon also wants Cablevision to stop offering for sale or lease imported digital set-top boxes that allegedly violate its patents.

It says Cablevision is using Verizon set-top box technology to compete against it. Verizon offers FiOs TV service in the New York City area.

Cablevision said Verizon is suing because it can't compete.

"It is becoming increasingly clear that Verizon is having difficulty competing on the merits in the marketplace, so they are resorting to filing lawsuits and pursuing regulatory bailouts," Cablevision said in a statement. "We obviously plan a vigorous defense."

Verizon said it limited its complaint to one claim for each patent so that the matter could be resolved quickly in about 12 months.

Court OKs TV Rules Opposed by Comcast, Cablevision

WASHINGTON (AP) - A federal court Friday upheld regulations that require cable TV companies to make sports programming and other channels they own available on equal terms to rival TV providers such as satellite companies.

The ruling by the U.S. Court of Appeals for the District of Columbia leaves in place the Federal Communications Commission "program access" rules, which are intended to ensure that cable companies cannot withhold highly desirable programming that they own from competitors.

The rules require Comcast Corp., for instance, to make channels that it owns - including E! Entertainment, Versus and the Golf Channel - available to rivals such as DirecTV Inc., Dish Network Corp., AT&T Inc.'s U-Verse video service and Verizon's FiOS video service.

The decision was a setback for Cablevision Systems Corp. and Comcast, which were challenging the FCC's decision to extend a ban on exclusive programming contracts for five years.

Comcast has nonetheless pledged to extend the program access rules to the local NBC and Telemundo stations it would control as part of its proposed combination with NBC Universal. Comcast is seeking FCC and Justice Department approval to buy a 51 percent stake in NBC Universal from General Electric Co.

Comcast said it was disappointed in Friday's ruling.

"The program access rules are based on an outdated and obsolete view of the competitive landscape," Cablevision said in a statement.

DirecTV and Verizon hailed the ruling as a win for consumers.

"This decision protects consumers' ability to view the programs they demand as they gain new choices among video providers," Verizon said in a statement. The phone company has spent billions on its new FiOS fiber-optic network to deliver video and high-speed Internet services.

The circuit court decision comes amid growing concern in Washington about the rules governing access to both broadcast programming and channels owned by cable companies.

On Sunday, after talks broke down between ABC and Cablevision over the fees the cable company would pay to air the network, the ABC station in New York pulled its signal from Cablevision, causing subscribers to miss the first 15 minutes of the Oscars. A coalition of cable, satellite and phone companies seized on the incident to ask the FCC to prohibit broadcasters from interrupting signals during negotiations or before popular events, and to mandate binding arbitration.

FCC Chairman Julius Genachowski told lawmakers at a hearing Thursday that the FCC would review whether existing federal regulations still make sense.

Friday's ruling is the second key victory for cable rivals in as many months when it comes to program access rules.

In January, the FCC voted to close to the so-called "terrestrial loophole," which lets cable companies get around program access rules by distributing programming over landlines rather than satellite connections.

Comcast, Cablevision and Cox Communications Inc. have relied on the loophole to deny sports programming to competitors such as DirecTV, Dish, AT&T and Verizon.

Genachowski praised Friday's ruling. "The commission's program access rules have played a vital role in making diverse and attractive video programming available to cable and satellite TV viewers," he said in a statement.

Oscar Party Crash: No Deal in Cablevision-ABC Feud

In Cablevision-ABC Fight, Oscar Viewers Could be the Losers

Cablevision Systems Corp. said early Sunday March 7, 2010 the stall in negotiations should be blamed on Disney CEO Bob Iger [Pictured].

NEW YORK (AP) - Millions of cable subscribers faced the prospect of Oscar night without the Academy Awards broadcast Sunday after ABC's parent company switched off its signal to Cablevision customers and the two companies blasted each other for failing to reach a deal in a dispute over fees.

In dueling statements dispatched early Sunday, the two companies traded blame for the stalemate ahead of one of the most-watched nights of television.

"Cablevision has once again betrayed its subscribers," said Charissa Gilmore, a spokeswoman for the Walt Disney Co. and ABC Television Group, in a statement. "Cablevision pocketed almost $8 billion last year, and now customers aren't getting what they pay for ... again."

Cablevision Systems Corp. said the stall in negotiations should be blamed on Disney CEO Bob Iger. "It is now painfully clear to millions of New York area households that Disney CEO Bob Iger will hold his own ABC viewers hostage in order to extract $40 million in new fees from Cablevision," said Charles Schueler, a Cablevision executive vice president, in a statement.

The signal can still be pulled from the air for free with an antenna and a new TV or digital converter box.

Cablevision has argued that Disney is seeking an additional $40 million a year in new fees, even though the company pays more than $200 million a year to Disney.

Disney counters by arguing that Cablevision charges customers $18 per month for basic broadcast signals but does not pass on any payment for ABC to Disney.

The dispute is similar to a standoff at the end of last year between News Corp. and Time Warner Cable over how much Fox television station signals were worth. That tussle, which threatened the college football bowl season and new episodes of "The Simpsons," was resolved without a signal interruption.

Cablevision also feuded with Scripps Networks Interactive Inc. in a January dispute that temporarily forced the Food Network and HGTV off the service. Neither side provided terms of an agreement that restored the channels after three weeks.

Disney and Cablevision have been airing dueling advertisements about the ongoing dispute for the past week. Also, lawmakers in Washington have chimed in, suggesting the Federal Communications Commission step in.

The company's previous contract with Cablevision expired more than two years ago, but it was extended month by month as talks continued.

Under previous arrangements, Disney was paid for cable channels such as ESPN and Disney Channel, but gave its ABC broadcast signal away for free, a situation that most broadcasters are now trying to change.

"We can no longer sit back and allow Cablevision to use our shows for free while they continue to charge their customers for them," WABC-TV president and general manager Rebecca Campbell said in a statement.

Schueler suggested that disgruntled viewers should blame Disney's top executive if the station goes dark.

"There is one man who is going to decide whether New York gets to see the Oscars, and that's Disney President and CEO Bob Iger," he said in a statement late Friday. "We call on Bob Iger to stop holding his own viewers hostage, end his threats to pull the plug on ABC at midnight and instead work with us to reach a fair agreement."

WABC-TV is the most-watched TV station in the country, said Disney, which is based in Burbank, Calif.