Time Warner Cable Chief: Process of Negotiating Fees ‘Completely Broken’

Month after settling dispute with News Corp., Glenn Britt says recurring battles with programmers “not working for consumers”

While talking to investors about his company’s return to profit during the fourth quarter, Time Warner Cable CEO Glenn Britt said on Thursday that the way television programmers and distributors negotiate fees needs to be overhauled.

"The retrans process is clearly broken," Britt said. "I think we need to reform how these negotiations work. It's not working for consumers, which means it's not really working for the broader industry."

Britt’s comments came less than a month after News Corp.-owned Fox and Time Warner Cable, the nation’s second-largest cable operator, were became deadlocked in a contentious battle over fees. The dispute spilled over into the New Year before the sides were able to negotiate a deal. Without a new deal, Fox had threatened to pull its programming — like “American Idol” and “24” — from Time Warner Cable, which would have affected millions of customers. (Time Warner previously had a similar dispute with Viacom.)

A similar outage occurred between Cablevision and the Scripps Network, which resulted in thousands of Cablevision subscribers in the Northeast losing HGTV and the Food Network for nearly a month.

On Thursday, TWC executives wouldn’t disclose details of their deal with News Corp., but said programming costs will rise “modestly.”

Robert Marcus, TWC’s chief financial officer, said of the agreement: "Whether we got tough or rolled over is somewhat in the eye of the beholder.”

Meanwhile, the company performed better financially in the fourth quarter than Wall Street had expected. TWC swung to a profit, and was able to pay shareholders a dividend, saying that demand "sharply increased" for broadband and phone services.

TMC said total video subscribers in the fourth quarter fell by 105,000, ending the year at 12.86 million. The company managed to add 120,000 Internet subscribers and 75,000 residential phone subscribers – but those numbers were down year-over-year and the company warned it expects that trend to continue.

Related:

It's Done! Fox, Time Warner Strike a Deal