Fox and Cablevision Still ‘Far Apart’ in Carriage Dispute (Update)

Sen. Kerry vows to introduce new legislation to prevent future blackouts

Last Updated: October 17, 2010 @ 5:40 PM

Update: Sunday 2:07 p.m. PT

Talks have broken off between Cablevision and News Corp. with no agreement on retransmission fees in place.

Both sides will return to negotiations tomorrow, although Cablevision is continuing its push to get the Fox to agree to mediation.

In the meantime, some 3 million Cablevision customers will go another day without access to Fox programming

"The longer this shameful News Corp. blackout of the NFL and Major League Baseball continues, the more obvious it becomes to everyone, including political leaders of both parties, that binding arbitration is the fastest and fairest way to return Fox programming to Cablevision customers," Charles Schueler, Cablevision’s executive vice president of communications, said in a statement.

Fox said that "no material progress" was made in talks. In an open letter to Cablevision customers Lew Leone, vice president and general manager of WNYW FOX5 and WWOR My9, hit back at the cable channel's characterizations of News Corp. as being motivated by greed.

"Frankly, it is hard to believe a company like Cablevision is accusing anyone else of greed," Leone's letter reads. "Cablevision customers pay an average of $149 per month including up to $18 for broadcast stations – and that earned them an average profit of over $795 per subscriber last year. Yet, they have only offered to pay less than a penny a day for FOX5 and My9."

Update: Sunday 10: 28 a.m. PT

Negotiators for Cablevision and News Corp. returned to the bargaining table on Sunday to see if they could reach a deal on retransmission fees.

An agreement was still not in place for the start of Sunday football. The 3 million New York area fans who tuned into to Fox to watch the hometown Giants face the Detroit Lions on Sunday afternoon were instead confronted with a message from Cablevision slamming News Corp.

In a sign that it area residents may have to make due without sports for awhile longer, Fox officials were telling the media on Saturday night that the two sides were still far apart.

This kind of high stakes brinkmanship has become a staple of carriage disputes throughout the past year. Thus far companies such as Time-Warner, Cablevision, Disney, and News Corp. have been able to avoid government intervention, but this latest fight may have finally emboldened Congress to act.

On Saturday, Sen. John Kerry (D – Mass.) announced he would introduce new legislation aimed at preventing termination of signals. Kerry's "new rules of the road," would empower the Federal Communications Commission to push both sides into binding arbitration, something Fox has avoided throughout the latest dispute.

“At this point, both the public confrontations that led up to the signal being pulled and the pulling of the signals have led me to conclude that the answer lies not in trying to relitigate or referee every single dispute, but in systemic reform of the law," Kerry said. "Otherwise, high stakes games of chicken will just continue."

As the talks drag on, Fox isn't just blocking access to its suite of channels, it is also preventing customers of Cablevision's from having Internet access to Fox web sites or to Fox content on Hulu.com.

Blackouts of this length are highly unusual. Other carriage disputes, such as the March feud between Cablevision and the Walt Disney Company may have resulted in pulled signals, but didn't drag on for days as the current fight with Fox has.

Update: Friday 9:08 p.m. PT

After failing to reach a resolution with Cablevision, Fox pulled its signal from the homes of some 3 million subscribers in New York, New Jersey, Connecticut and Pennsylvania on Friday night.

The midnight ET deadline came and went without an agreement on retransmission fees, despite calls from lawmakers and the Federal Communications Commission to reach a resolution.

Fox is attempting to hike the fees it charges Cablevision to rebroadcast its content from $70 million annually to $150 million.

The failure to reach an agreement is bad news for sports fans in the region. Fox is scheduled to air Game 1 of the National League Championship series on Saturday. In that game, the Phillies are squaring off against the San Francisco Giants to see who will advance to the World Series. And on Sunday, Fox airs football games.

The blackout struck the region at midnight on the dot — with some on Twitter noting that it ironically came in the middle of a Verizon FiOS commerical.

After the deadline passed, Fox programming was replaced by a Cablevision message to subscribers slamming News Corp.'s "corporate greed" and calling for an independent arbitrator to intervene.

Almost immediately after the signal was pulled, both sides began pointing the finger at one another.

“We remain far apart and Cablevision has made it clear that they do not share our view regarding the value of Fox’s networks," said Mike Hopkins, president, Fox Networks affiliate sales and marketing, said in a statement. "After days of posturing and the appearance of negotiating, they formally stopped even the pretense of negotiating at 8pm – declaring an 'impasse' – and made no further efforts toward reaching a new agreement before the expiration.”

Cablevision spokesperson Charles Schueler once again called for News Corp. to enter into mediation.

Schueler countered: “We demand that News Corp. put the viewers ahead of its own greed and immediately restore these channels to our customers and agree to binding arbitration to reach a fair agreement. What is News Corp. afraid of?”

Fox's move was sharply condemned by interest groups, who called on the government to crack down on the kind of brinkmanship that has become a staple of carriage feuds over the past year.

"How much longer will consumers have to live in fear of blackouts by broadcasters? What community is next? The FCC and Congress must immediately step in to reform retransmission consent laws,” the American Television Alliance said in a statement.

FCC Chairman Julius Genachowski said he would continue to push both sides to return to the bargaining table.

"Each year, thousands of agreements between broadcasters and pay-TV providers are reached without interruption of customer viewing," the chairman said in a statement. "I remain hopeful that these two companies will do what is in the best interest of consumers and find a way quickly to resolve their differences. While federal law provides that the terms will be set by agreement between private companies, Fox and Cablevision share responsibility for protecting their audience's interests. I expect both companies to live up to this responsibility

Earlier

Bad news, baseball fans.

The clock is ticking and still no word if Cablevision and Fox will reach an agreement on retransmission fees by the 8 p.m. ET deadline Friday.

Representatives from both camps were working to broker an 11th hour deal in News Corps. New York headquarters, according to several reports.

If an agreement isn’t brokered, some 3 million subscribers in New York and Pennsylvania could find their signals pulled at midnight — the day before Fox is scheduled to air Game 1 of the National League Championship series. The Phillies are squaring off against the San Francisco Giants to see who will advance to the World Series.

The Yankees are also competing in the American League Championship Series, although those games will be broadcast on TBS. Fox will air the World Series.

Fox is trying to force Cablevision to pay nearly $80 million more for the rights to carry its programming.

One group that won’t intervene is the Federal Communications Commission. FCC Chairman Julius Genachowski said Thursday the agency would not intervene to prevent a blackout.

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