Barring a last-minute deal - or miracle - 14 million Time Warner Cable households across America could wake up New Year's Day to static where the Sugar Bowl should be. That's because the nation's second-largest cable operator and News Corporation are now locked in a loud fight over how much the cable company should pay for the right to retransmit the signal of Fox Broadcasting affiliates to its customers.
Fox has sought an increase in the amount Time Warner pays to retransmit Fox broadcast programming to $1 per subscriber per month. Currently, most local broadcast TV stations receive 25 to 50 cents per subscriber from cable companies for retransmission rights; even more common are arrangements where broadcast networks allow cable systems to retransmit their programming in exchange for paying for several of their cable-only channels -- for example, NBC lets cable systems carry their broadcast network at no charge if they also pay for MSNBC, CNBC and The Weather Channel.
Cable operators argue that allowing the fee proposed by Fox to go through would mean passing the increased costs on to subscribers when other broadcast networks follow suit. Time Warner states that subscribers could see their bills rise by $10 to $20 per month if it agrees to Fox's terms.
Both sides in the dispute have taken to the Web to plead their case. Time Warner Cable asks its subscribers to tell them whether they should "roll over or get tough" in response to Fox's proposal; according to their site, more than 800,000 visitors have urged that Time Warner "get tough" with Fox. Fox, for its part, lays out in detail what it says are the "myths and facts" about their proposed fees and why they are requesting them on its KeepFoxOn.com site.
One industry blog, Engadget HD, remarked that Time Warner Cable is notoriously cheap when it comes to paying for content, going so far as to suggest in a post that the cable operator might want to consider accepting smaller profit margins rather than hike customer bills -- echoing arguments on KeepFoxOn.com about cable industry rate hikes and profits.
Congress has even seen fit to enter the fray - Sen. John Kerry (D-Mass.) proposed that the two sides agree to arbitration to settle the dispute. Time Warner accepted the offer, but Fox declined, recognizing that withholding its content is the only leverage it has in the dispute.
As of now, there is no movement towards a deal on either side, and the clock continues to tick towards a midnight Dec. 31 deadline. After that, millions of New Yorkers, Angelenos, Dallasites, Detroiters, and others may find themselves bereft of their bowl games on New Year's Day and "American Idol"-less soon thereafter.
Written by Sandy Smith
For HULIQ.com
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