Time
Warner Cable and CBS are in the final hours of a contract dispute that may
leave millions without access to CBS programming. If there is no resolution to
the fee dispute, CBS could black-out Time Warner customers as of the recently
extended deadline of 9:00 a.m. Thursday.
Time
Warner Cable (TWC) claims that CBS (CBS) is
demanding a rate hike for cable customers in major cities that is out of line
and will cause cable rates to jump. The cable giant says the fees requested will
be 600% more than customers in smaller cities will pay.
Cable companies and satellite providers typically pay broadcasters
"retransmission fees" in order to air network-owned local station programming.
In addition to national networks like CBS, Fox (FOX), Disney's (DIS) ABC
and Comcast's (CMCSA) NBC,
Time Warner Cable must also enter into agreements with other local stations,
often owned by other media companies.
That's where the negotiation is at an impasse. CBS is
currently negotiating on behalf of the several local affiliate networks it owns
outright, and Time Warner Cable argues that CBS is demanding fees that are much
larger than the fees it pays to other independent local stations that carry CBS
shows.
Customers in New York, Los Angeles, Dallas, Boston,
Pittsburgh, Chicago, Detroit and Denver could be affected if no agreement is
reached Thursday. But customers in other areas of the country are not in
jeopardy of losing the CBS channel.
The negotiation tactics have gone public with CBS airing TV
commercials warning customers that "Time Warner Cable is threatening to hold
your favorite shows hostage.”
CBS
released a statement saying that, “Time Warner Cable is planning to drop the
most popular programming in its entire channel lineup because it won't
negotiate the same sort of deal that all other cable, satellite and telco companies
have struck with CBS.” And that “CBS remains committed to working towards a
mutually agreeable contract."
Time Warner Cable
spokeswoman Maureen Huff said that the company's executives are also hoping to
reach a fair agreement. "We are willing to pay for CBS, and we have
offered them significant fees," Huff said. "But their current demands
don't represent a good value for our customers.