Extensions Granted in Retrans Talks

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As the New Year rang in, several disputes between programmers and distributors erupted last week, with cable systems dropping a couple of regional sports networks and at least one TV station.

But even with all retransmission-consent deals across the country expiring Dec. 31, there was not a deluge of situations in which cable operators dropped over-the-air TV stations, or in which broadcasters pulled their signals. Instead in many cases, MSOs and TV stations agreed to extensions of 30 to 90 days, so they could continue to pursue new contracts.

Negotiations regarding two major cable networks continued with major MSOs, too. Time Warner Cable continued to carry ABC Family, even though its network deal expired Dec. 31. Spokesmen for the MSO and ABC Family said talks were ongoing.

And, as of last Friday, both Comcast Corp. and Cable One remained without long-term deals to pay a rate increase for the so-called "TNT Plus" — a Turner Network Television feed that includes high-cost sports programming such as National Basketball Association games. Officials with Turner Broadcasting System Inc. and Comcast declined to comment.

Regarding retransmission consent, the American Cable Association, a lobbying group that represents small independent cable operators, last week was tallying up how many TV stations were deleted in squabbles as old deals expired.

Cash conflicts

ACA president Matt Polka estimated there were eight to 10 such markets, and noted that his members had been having particular problems with TV stations owned by Cox Broadcasting Inc. Polka found that ironic, since Cox Broadcasting is a sibling of MSO Cox Communications Inc., which he said had vowed not to be browbeaten into doing retransmission-consent deals.

While many extensions have been granted, Polka anticipates that once those expire, retransmission-consent disputes "will come to a head," because cable operators and TV stations remain very far apart on many issues.

The main problem is that broadcasters are seeking cash compensation for carriage. Cable operators contend that if they pay any one TV station, they would have to pay them all in their markets, because of "me-too" clauses in existing retransmission-consent deals.

No extensions were granted in the license-fee dispute between Time Warner Cable and the Fox Cable Networks Group over the Sunshine Network in Florida and Fox Sports Net North in Minneapolis. Both Fox Cable regionals were dropped off Time Warner Cable systems with 710,000 and 150,000 subscribers, respectively, last week. Fox Cable pulled their signals after failing to reach a new contract with Time Warner.

"They refused to enter into a new agreement with us," said Fox Cable executive vice president of affiliate sales and marketing Lindsay Gardner. "We haven't talked in two weeks. This is not something that went down to the wire."

Time Warner had offered Fox Cable a 10 percent rate increase for each of the regionals, according to MSO spokesman Mark Harrad.
"The customers who are not fans, who do not watch these games, cannot be expected to subsidize the fans year after year at escalating prices," he said.

Fox Cable was looking for roughly a 45 percent raise for FSN North and a 60 percent hike for Sunshine, up from their respective 2002 rates of $1.52 and 90 cents.

CBS affiliate drop

Back on the retransmission-consent front, last week several small cable systems dropped CBS affiliate WMAZ-TV in Macon, Ga., which was demanding payment for carriage. Valley Cable TV Inc. of Fort Valley, Ga., Forsyth CableNet of Forsyth, Ga., and Charter Communications Inc. were among the operators that deleted WMAZ after their retransmission-consent deals with the broadcaster expired Dec. 31.

WMAZ had been seeking a fee of 75 cents a month, per subscriber, this year from the operators, escalating to 85 cents in 2004 and $1 in 2005, according to Robert Barnes, vice president of operations for Valley Cable.

"The issue is that we are not going to pay them for carriage," Barnes said. "We're extending their coverage area."

Officials at WMAZ, which is owned by Gannett Co., couldn't be reached for comment.

Forsyth CableNet is municipally owned, and felt it could not ask subscribers to bear the cost of paying WMAZ for carriage, according to system manager Dennis Rolling.

"I'm going to be doing a video spot explaining what happened," he said.

One potential retransmission-consent flap was resolved last week in Denver, when the Comcast-owned AT&T Broadband system and ABC affiliate KMGH reached a new deal. The system had gone to court seeking an injunction to bar KMGH from pulling its signal in a public dispute.

But the suit became moot when both sides resolved their differences, and AT&T withdrew the action. As part of the agreement, the MSO reportedly has agreed to carry a local news channel that the broadcaster will create.

Finally, in Vermont, tiny Duncan Cable — with 1,100 subscribers in Wilmington — dropped New England Sports Network, as its contract with the regional sports network expired Dec. 31. Duncan Cable owner and operator Cliff Duncan said NESN was looking to raise its license fee by 71 percent in just the first year of a new five-year pact.

"It's time to take a stand with some of these programmers," Duncan said.

Steve Donohue contributed to this story.

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