We've Got Hollywood Covered

Time Warner Cable Publicly Proposes Compromise to Get CBS Back on Air (Updated)

Cabler gives network a choice: Accept the terms we "reluctantly" hammered out, or sell CBS a la carte

Time Warner Cable publicly proposed an immediate compromise with CBS on Monday to get the Eye back on the air — an unusual step in a negotiation that has left television's most-watched broadcast network dark in several major markets since Friday.

The proposal includes a choice: either accept the terms that TWC "reluctantly" hammered out, or sell CBS a la carte.

Either way, it's clear that TWC wants this to end — and quickly.

"In the interests of getting CBS back to our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations," TWC CEO Glenn Britt wrote in a letter addressed to CBS Corp. head Leslie Moonves.

Although Britt states the terms "are not ideal," he points out that both TWC and CBS have worked productively under them for years.

Still, CBS isn't willing to accept the compromise. The network has released a statement callling the proposal "a sham."

Also read: CBS and Showtime Go Dark in Retrans Fight With Time Warner Cable

If CBS chooses to continue the blackout — which has also affected a handful of other channels, including Showtime — TWC says it would agree to continue carrying CBS on an a la carte basis. TWC would allow CBS to set its own price and terms — with 100 percent of that price going directly to the network.

"This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming," Britt added.

Also read: CBS' Les Moonves a 'Bellicose Broadcast CEO With a Napoleonic Complex,' Says Cable Assn. Chief

Friday's blackout became the first time CBS or Showtime has allowed their signal to go dark during a retransmission dispute.  It affected 3.5 million homes — nearly a third of TWC's subscribers — in major markets including New York City, Los Angeles and Dallas.

TMC, FLIX and Smithsonian also went down in the failed negotiations that began after a 2009 agreement expired at the end of June. The deadline was originally July 24, was pushed several times.

As usually happens in these things, the sides exchanged barbed press releases as the deadline approached, with TWC accusing CBS of refusing to engage in "productive discussion" and "not willing to come to reasonable terms."

CBS maintained that it was vastly underpaid for the bulk of viewers it brings.

"What CBS seeks, and what we always have sought from the beginning, is fair compensation for the most-watched television network with the most popular content in the world," the network said in a statement last week. "We will not accept less."

See the full letter Britt addressed to Moones, below:

Dear Les,

In the interests of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts. Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers.

Alternatively, if you are unwilling to agree to this proposal, we would also be willing to
resume carriage by allowing CBS to make its stations available on an a la carte basis at a
price and on terms of its choosing, with 100% of that price remitted to CBS. This way,
rather than our debating the point, we would allow customers to decide for themselves
how much value they ascribe to CBS programming.

In connection with both of these proposals, we would expect you to allow us to
immediately resume carriage of your CBS stations (and other CBS-programming services)
on retroactive terms as we work out any necessary details. The extension would be
ongoing to make sure consumers are not once again held hostage by CBS during this
process. We expect, though, that since each of our proposals is very straight forward, the
papers can be completed quickly.

Finally, we call on CBS regardless of whether it accepts or rejects our proposals, to
immediately cease its blocking of CBS.com content from TWC's high-speed Internet
customers. Regardless of the other issues between us, itis surely beyond the pale for you
to subject these Internet customers to blocking of content that is made available for free to
all others. This is especially so given that CBS uses free public airwaves to broadcast that
content and has public interest obligations that it is plainly flouting. In addition, this
conduct is abhorrent in that CBS is using this blocking to punish TWC's Internet customers 
across the country, including millions of consumers in cities where we continue to carry CBS on our cable systems through agreements with other CBS-affiliated stations; is blocking customers of other multichannel providers, including Direct TV, with whom CBS has no dispute; and is apparently blocking customers of certain other ISP's, to which TWC provides wholesale Internet services.

We stand ready to speak with you immediately to follow up on these matters.