UPDATE, 2:24 PM: Time Warner Cable’s response to Hearst: “Negotiations are ongoing,” it says. That’s it. But the American Cable Association, an industry trade group, was more outspoken about the broader dispute over retransmission consent rules. “Broadcasters support the status quo because it allows them to leverage monopoly market power and friendly federal regulations to slam viewers with sudden signal blackouts that don’t end until targeted pay-TV providers surrender outrageous amounts of cash, driving up monthly bills,” it says. “The evidence is convincing that the market is broken and that rules and regulations that pre-date Netscape’s IPO need to be modernized to reflect current market conditions.”
PREVIOUS, 12:15 PM: There’s something fishy about the negotiations to resolve the week-long contract dispute between Time Warner Cable and Hearst Television, according to the broadcast company’s president David Barrett. His stations in 13 communities went dark on the No. 2 cable company’s systems last week in a disagreement over how much TWC should pay to carry their programming. But peace should be at hand: Hearst told TWC yesterday that it could accept a deal that’s just 5% higher than the offer the cable company made on July 9. The dispute “is ripe for settlement – today,” Barrett says. What’s the hang-up? Hearst says that TWC hasn’t responded to its proposal. Barrett thinks he knows why. TWC, he says, is “acting as the conductor of the public relations bandwagon” to persuade Congress to step in and change the laws governing retransmission disputes. Pay TV providers want the flexibility to continue transmitting broadcasters’ programming during a negotiation — which would weaken TV stations’ bargaining power. TWC, Barrett says, “has decided to hold its subscribers hostage in the hope that it can pressure Congress to intervene.” The National Association of Broadcasters took a similar position in a statement this morning about the disputes stations have had with TWC, DirecTV, and Dish Network: “Rather than negotiate in the free market for the most popular programming on TV,” the lobby group said, “this cozy pay TV cabal is manufacturing a phony crisis in hopes that Congress will fix a ‘problem’ that these companies are creating.” We’re waiting for Time Warner Cable’s response, and will update when it lands.
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