LIN Stations Warn of Looming Time Warner Drops
Retrans-Consent Standoff Could Impact 15 Stations
By Linda Moss -- Multichannel News, 10/2/2008 11:15:00 AM
Several LIN TV stations Thursday warned their viewers that Time Warner Cable “will cease” carrying their signals “sometime today” after both sides—so far—have been unable to reach a new retransmission-consent deal.
The current agreement between Time Warner and LIN TV expires at the end of the day today, Oct. 2, and negotiations are continuing.
The standoff involves 15 stations in Austin, Texas; Buffalo, N.Y.; Columbus, Ohio; Dayton, Ohio; Fort Wayne, Ind.; Green Bay, Wis.; Indianapolis; Mobile, Ala.; Springfield, Mass.; Terre Haute, Ind. and Toledo, Ohio.
In Indianapolis, the actual operator carrying several LIN-owned stations is Bright House Networks. Bright House has a business relationship with Time Warner, which negotiates its retransmission-consent deals in that market, according to a Bright House spokeswoman.
CBS affiliate WISH-TV in Indianapolis on its Web site posted a message to Bright House customers, saying that as of midnight tonight the cable operator will no longer have the right to carry it, WNDY-TV, WIIH and LWS.
In Buffalo the two LIN TV stations, CBS affiliate WIVB-TV and CW affiliate WNLO-TV, posted a very similar message to Time Warner subscribers in that market.
In that upstate New York DMA, the LIN stations said, “Please know that we are disappointed we have not reached a deal yet and that our loyal viewers may no longer be able to watch their favorite programming on Time Warner's cable system.”
“We have tried in earnest for two months to reach an agreement with Time Warner,” the Web posting continued. “The fact that we have agreements with every major cable, satellite and telecommunications company, except for Time Warner, makes the failure to reach an agreement with Time Warner even more frustrating.”
Time Warner spokeswoman Robyn Watson said talks with LIN TV are continuing, and Bright House posted a detailed status report on its Web site telling customers it expects “a favorable resolution” of the situation with the broadcaster in Indianapolis.
“We would like to reassure you that we believe there will be no interruption in service,” Bright House said. “We are confident that the signal will not be withheld…There have been times, in the past and recently, in which the cable television industry has faced hurdles in programming negotiations. We are proud that these have always resulted amicably and with no loss in programming to our customers.”
In a series of eight bullet points, Bright House also said that LIN’s WANE-TV in Marion, Ind., is also involved in the retransmission-consent dispute.
“We are aware of the importance of these stations and are taking all necessary steps to continue carriage,” Bright House said on its Web site. “We were very surprised to learn that LIN TV, owners of WISH-TV, WNDY-TV, LWS and WIIH (Indianapolis) and WANE (Marion, Indiana) appears to be considering removing their signal. We do not plan to not let that happen.”
The issue being negotiated is the cash compensation that LIN TV is seeking for its stations.
On the site in Buffalo, the LIN stations said, “We are asking Time Warner to pay fair market value for our programming, and our programming should not be free to one of the largest cable companies in the nation who wants to take our signal and resell it to you for a profit.”
Time Warner doesn’t want to pay for broadcast programming that’s available for free over the air by anyone with an antenna.
Also on Thursday, Pali Research analyst Rich Greenfield issued a response to a report he did Wednesday on the LIN TV-Time Warner negotiations.
In that report, Greenfield noted that one of LIN’s stations, KXAN-TV in Austin, Texas, has posted a question-and-answer section about its dispute with Time Warner, and its position on retransmission-consent compensation.
On the site, the station says, “Here is the basic analogy: If you were to get a drink of water at a public drinking fountain, it is free, but once the water is placed in a package, it is no longer free. The same holds true for local television programming delivered through a subscription-based provider.”
Joseph Young, senior vice president and general counsel for Mediacom Communications, informed Greenfield that the Sinclair Broadcast Group had used a similar analogy, involving water, to argue its case for retransmission-consent compensation.
“These arguments do not stand scrutiny,” Young said. “What the bottler charges for cannot be the water—which is free to everyone—because rational, informed consumers would not pay for a product that they can get for free.”
What consumers would be paying for is the added value of a company putting the water in bottles, distributing it to retailers and making home delivery available, according to Young.
“What they are paying for, then, is not the signal or its content, which are available for free, but instead the two values added by the cable company: delivery of better reception than is often available over the air and, for customers who desire to view the various cable networks available only through a subscription video service, the convenience of being able to seamlessly “flip” from cable networks to broadcast stations without having to use an ‘A/B’ switch or other method,” Young told Greenfield.
