Business

Associations Take Sides in CBS-Time Warner Battle Over Cable Fees

Millions of NFL fans could miss seeing their teams play if the standoff between CBS and Time Warner Cable, now nearing the one-month mark, isn’t resolved soon. Industry associations have weighed in, picking their sides.

Editor’s Note: Since this story was published, Time Warner Cable and CBS reached a deal regarding retransmission fees. Details of the settlement are available here.

Pro football fans are getting restless, but a stalemate between CBS and the country’s second-largest cable system shows no signs of ending anytime soon.

And associations that represent interests on both sides are working to gain some yardage for their respective industries. More details below:

When you hear CBS and other broadcasters say they offered a cable operator a contract extension deal, it usually helps to consult the NFL schedule.

The conflict

Since August 2, CBS programming—including shows it owns on subscription channels, such as Showtime’s Dexterhave been unavailable to 3 million customers in markets controlled by Time Warner Cable, one of the country’s largest cable providers. New York City, Los Angeles, and Dallas are among the major markets affected.

At issue are the retransmission fees that broadcasters receive from cable and satellite companies for their services, a sticking point for both sides. CBS President Les Moonves is among the leading advocates of increasing the fees. The 1992 Cable Television Consumer Protection and Competition Act requires cable providers to obtain “express authority of the originating station” to add local channels to lineups. The law charges the FCC with ensuring that the parties negotiate in “good faith” but does not give the commission explicit regulatory authority and thus far it has been reluctant to issue rules. The cable industry has called for reform of the retransmission consent system.

The impasse is not the first of its kind, but its length (as well as the prominence of the network involved) is unusual and has led the FCC to intervene in the dispute.

CABLE association’s stance

In a letter to the FCC, the American Cable Association’s Matthew Polka, while noting the need for broader reform of the 1992 law, argued that the agency needs new rules to prohibit blackouts during content disputes.

“ACA believes fundamental reform is necessary,” Polka wrote, according to Broadcast Engineering. “However, broad changes to the rules governing retransmission consent need not stand in the way of the commission taking some more limited regulatory action now to ensure that consumers are never again left without access to local broadcast signals when disputes arise.”

Polka suggested a narrowly tailored rule that would keep broadcasters on the air using the previously agreed-upon contract while the matter is being settled—something he says would not force the FCC to take sides.

Gridiron pressure

With the conflict dragging on into its fourth week, Politico noted that pressure is mounting on both sides to make a deal as the NFL season approaches. The season kicks off September 5. Football fans are expected to be particularly interested in the September 8 game dubbed the “Manning Bowl,” when star quarterback brothers Eli of the New York Giants and Peyton of the Denver Broncos will go head to head.

“When you hear CBS and other broadcasters say they offered a cable operator a contract extension deal, it usually helps to consult the NFL schedule,” the ACA’s Polka told Politico.

The National Association of Broadcasters, meanwhile, has stuck to its stance that Time Warner and other broadcasting providers are using “bullying tactics” to sway the FCC in the conflict. NAB President Gordon Smith told Politico that the “broadcasters have to be compensated fairly by pay-TV distributors” for those broadcasters to be able to bid on widely watched sporting events.

This isn’t the first time Time Warner has been caught up in a contract mess over football. Last year, the cable provider ended an impasse with the NFL Network that had lasted nine years.

(iStockphoto/Thinkstock)

Ernie Smith

By Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

Got an article tip for us? Contact us and let us know!


Comments