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Time Warner customers could lose ABC, Fox

December 7, 2010
By CHRIS KNIGHT, Enterprise Senior Staff Writer

Local customers of Time Warner Cable could lose two of the four major television networks next week unless a dispute is resolved between the cable provider and a company that broadcasts the two stations in the region.

A carriage agreement between Time Warner and Smith Media LLC, which owns Burlington, Vt.-based WVNY ABC 22 and WFFF Fox 44, is set to expire on Dec 15. The two sides have been trying to negotiate a new deal but have yet to come to terms.

Through scrolling announcements on both stations and information posted on a website devoted to the issue, Smith Media has been warning ABC 22 and Fox 44 viewers who subscribe to Time Warner that they may lose the stations if an agreement isn't reached by the 15th.

"This means that those subscribers will lose access to two of the four major networks, and two of the four stations providing local news about their hometowns," reads the website - "They will also lose FOX and ABC programming including Fox NFL Sunday, ABC College Football, House, Glee, Modern Family, Grey's Anatomy and Desperate Housewives."

Vic Vetters, Smith Media's vice president and group manager, told the Enterprise Monday that he's optimistic a new deal can be reached.

"We're hopeful that all parties involved are going to get down to business, roll up their sleeves and strike a deal," he said. "But we're at such a point in time where people need to be notified that this is a possibility."

When cable TV was in its infancy, cable companies were allowed to broadcast local television stations to their subscribers without compensating them. Those so-called "retransmission consent" rules were changed roughly 20 years ago by the Federal Communications Commission. Broadcast TV stations were given two options: They could require the cable provider in their market to carry their signal and get no compensation for it, or they could negotiate an agreement with the provider to carry their signal and demand a payment.

"Local television stations have been asking, after so many years of being out there on cable, for the fair value of their services," Vetters said. "Up until now, there hasn't been any cash compensation for that."

Vetters declined to say how much money Smith Media is seeking from Time Warner. The company's website says it offered Time Warner "a fair deal."

"We have been trying for four years to reach an agreement with Time Warner Cable," the website says. "We have granted Time Warner Cable extension after extension. Despite countless hours of negotiating, Time Warner Cable simply refuses to pay a fair price for two of the most popular channels on its system."

Stephanie Salanger, Time Warner's Central New York communications manager, said her company negotiates hundreds of these kinds of agreements each year. Most are settled privately, and customers don't experience any interruptions, she said.

"We're not sure why some holding companies are choosing to make these so public and so antagonistic," she said. "For some reason they're choosing this scare tactic. We're continuing to negotiate and work hard in good faith to reach an agreement that will prevent any interruption from these channels, and we're optimistic we can do so."

Salanger also said it won't be Time Warner's decision to drop the two stations, if that should happen.

"We don't pull the programming," she said. "That holding company or that network company pulls the programming. We buy it from them."

Time Warner Cable has launched its own website to tell its side of the story - The site says 40 cents of every dollar collected from Time Warner customers is paid to programmers, 54 cents covers the company's operations, and 6 cents is net income. If Time Warner is forced to pay more for programming, it says customers will be impacted.

"In recent years, that's exactly what's happened," the website says. "Some of those broadcast TV stations and cable networks have been demanding enormous price increases - as much as 300 percent more. And if we don't pay up? Then they threaten to pull the plug on the sports, entertainment and news you deserve. That puts us in a tough position - roll over and raise your prices or get tough and risk losing the programming you love."

If an agreement with Smith Media can't be reached, Salanger said Time Warner is exploring other options to provide Fox and ABC programming to its subscribers, though she declined to be more specific.

Time Warner is currently involved with similar negotiations with Sinclair Broadcasting, which owns more than 30 television stations located in 21 markets, including Fox affiliates in Buffalo, Rochester and Syracuse. Those stations could go dark on Jan. 1 unless a new franchise agreement is reached. The current agreement expires Dec. 31.



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