The three-week deadlock between CBS and Time Warner Cable over the broadcaster’s programming fees is becoming increasingly desperate as the first official NFL game on September 5 inches closer.
The conflict between the two media giants has caused 3.2 million cable subscribers in New York, Dallas and Los Angeles to suffer through programming blackouts, including missed NFL preseason games.
The Hollywood Reporter wrote that CBS took out full-page ads this week in New York area newspapers decrying Time Warner’s recalcitrance. “It’s unfair. Time Warner Cable won’t let you see another Jets game this weekend,” the ad reads.
“The NFL certainly is a pressure point,” said Sean McManus, chairman of CBS Sports, on Tuesday.
The blackouts began August 2, after Time Warner objected to CBS’ demand that the cable company pay a substantial price increase — as much as $1 per consumer — for the right to re-transmit CBS’ programs. Time Warner called the fee hike exorbitant and removed local CBS stations from their systems.
On August 14, three Time Warner customers filed a class-action suit against Time Warner for dropping CBS programs for which they had already paid.
CBS has taken some hits at well; Variety reports that the legacy broadcaster now has a negative consumer-perception score, according to YouGov’s BrandIndex research group.
Even politician are getting involved. On August 12, California Democratic Sens. Barbara Boxer and Dianne Feinstein sent a letter urging the two companies to resolve the impasse.
But another letter sent to the House of Representatives August 12 by Americans for Job Security, the Council for Citizens Against Government Waste and three other like-minded organizations contends that federal regulations give CBS an unfair advantage in negotiations with the cable provider.
It implores Congress to pass the Next Generation Television Marketplace Act, which they believe will take the government out of such negotiations and allow for quicker and more equitable resolutions.
“The current dispute between Time Warner Cable and CBS calls attention to the urgent need to reform badly outdated rules governing the video marketplace – rules that pick winners and losers and harm consumers, namely the millions of Americans being deprived of access to CBS’ ‘free’ content due to the standoff,” the letter reads.
David Williams, president of the Taxpayers Protection Alliance and one of the signatories of the letter, explained why government rules have Time Warner essentially “backed into a corner.”
“Back in 1992, Congress told new cable companies they would have to carry the local affiliates of these stations — the ‘must carry’ rules — and you’re going to have to pay for the re-transmission of the signal,” he told The Daily Caller News Foundation. “If Time Warner is in Los Angeles, they can’t broadcast or re-transmit a signal from the San Diego CBS, it’d have to be the Los Angeles affiliate.”
Further, cable and satellite providers are required by law to carry local broadcast stations, and rules also mandate that they provide prime channel placement for these local outlets.
“They can’t put it on channel 400,” Williams said. “This is done by government fiat, it’s not what Time Warner thinks is the best placement.”
This effectively makes it impossible for Time Warner or other cable companies to shop around for the best broadcast partner. They can only legally do business with one local subsidiary, and the broadcasters know it.
CBS has also pulled all their online content from Time Warner’s internet broadband service, despite offering content free to internet browsers from other services.
“It’s separate from the dispute, but it is great leverage for CBS,” Williams said.
The letter sent by Williams’ Taxpayer Protection Alliance and other groups implores members of Congress to resume debate on the Next Generation Television Marketplace Act, a bill introduced last congressional session by Louisiana Republican Rep. Steve Scalise and former South Carolina Republican Sen. Jim DeMint.
“[The Act] completely undoes the rules originally created in 1992 and puts it more towards free market negotiations,” Williams said.
“The government is doing way too much, and regulating cable television seems to be a ridiculous waste of time,” he continued. “Just put it out there in the open and free market and let them have at it, rather than be stuck under these arcane rules formed 20 years ago, which in technology is like 1000 years.”
With Congress currently on recess, however, there’s little chance that CBS and Time Warner will meet on a level playing field. Williams believes a decision will soon be reached in CBS’ favor.
“I think approaching September, CBS’ hand will get stronger and stronger the closer they get to opening day for the NFL,” Williams concluded.
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