Fox News Channel pulled its signal from Massillon Cable TV Inc. in Ohio last week, claiming that the operator hasn' t met its required benchmarks to roll out the network despite being paid $10 per subscriber in launch fees.
In yet another contract dispute between an MSO and a programmer, FNC "deauthorized" and took its signal off the two systems Massillon owns, with 42,000 total subscribers, effective 12:01 a.m. this past Friday (March 31).
FNC also filed a breach-of-contract suit against Massillon last Friday in federal court in the Southern District of New York. The small, independent operator collected upfront launch fees, believed to be $350,000 in total, but still hasn' t launched FNC to as many subscribers as was contractually required, FNC alleged.
Massillon officials denied last Friday that they are in violation of their carriage agreement, adding that they asked to meet with FNC to discuss the issue back in February, but never received a response.
"Massillon would like to reach an amicable resolution and, as a result, I don' t want to enflame the situation," Massillon Cable vice president Bob Gessner said. "I don' t want to discuss the terms of our agreement in public, but there is an obvious difference in the interpretation of the contract."
FNC contended that in October 1996, Massillon agreed to carry FNC in exchange for the $10-per-subscriber upfront launch fee that News Corp. was then paying to get distribution for its fledgling all-news service.
Under the affiliation agreement, Massillon was obligated to carry FNC throughout 90 percent of the MSO-90 percent penetration at its two cable systems, which are located in Massillon and Wooster, Ohio, according to FNC officials.
But FNC said last week that despite several warnings to Gessner, Massillon is now only carrying FNC to 70 percent of its subscribers, even with the 90 percent-penetration caveat that came with the launch fee.
"We've lived up to our obligation, but [Gessner] hasn' t lived up to his," said John Malkin, FNC' s vice president of affiliate relations for its central and Southeast regions. "Nobody wants to pull a signal. But he signed a deal for 90 percent, and Massillon Cable has not done anything to remedy this."
Massillon was supposed to have reached the 90 percent-penetration benchmark by Sept. 30, 1999, FNC officials said. The network has never encountered this kind of problem with a cable operator before, according to Malkin.
FNC pulled its signal from Massillon midnight Friday without any warning, leaving the cable system scrambling to find out if there were technical difficulties. Gessner said he called the uplink facility to check out the problem.
It wasn't until 10 a.m. Friday that Gessner said he got a fax from FNC officials telling him they had pulled their network' s signal 10 hours earlier and they had filed a lawsuit. Gessner said he tried to call legal officials at FNC after getting the fax, but he couldn' t reach anyone.
Massillon is running a message on the FNC slot telling viewers that the signal is gone due to technical difficulties. As of last Friday morning, Gessner said, the MSO had only gotten a few phone calls from viewers. "We' ve never had a lot of demand for Fox News," he added.
About 31,000 Massillon subscribers currently get FNC, according to Gessner. He said his systems offer subscribers "fat basic," or 46 channels, at $27.25 per month. Then there is an additional tier of 24 networks, including FNC, which Massillon sells for $5.45 per month.
FNC also planned to run a print ad this week telling viewers why it pulled its signal. The ad says FNC "is no longer available" on Massillon because Gessner "has not honored his agreement to carry Fox News Channel' s fair and balanced news." The ad includes the system' s phone number.
The ad also tells residents that if they want "fair and balanced news" from FNC, they should call DirecTV Inc. or EchoStar Communications Corp.' s Dish Network, and provides the two direct-broadcast satellite providers' 800 numbers.
Gessner has been a longtime vocal critic of programmers. Two years ago, when ESPN was raising its license fees 20 percent, Gessner threatened to bump the sports network off expanded basic and on to an all-sports tier, a move the programmer said would have violated its contract.