Forum: Cox Cables Dirty Little War

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The following article was submitted by Edward MunsonJr., vice president of LIN Television Corp. LIN programs Fox affiliate WVBT in Norfolk,Va., under a local marketing agreement. WVBT and Cox Communications Inc.'s Cox Cableof Hampton Roads, Va., are currently in a retransmission-consent dispute. Since Jan. 1,WVBT has not been carried on Cox Cable.

In the Norfolk, Va., market, the six major broadcastnetworks and PBS cover most of the broadcast band -- channels 3 (ABC), 10 (NBC), 13 (CBS),15 (PBS), 27 (United Paramount Network), 33 (The WB Television Network), and 43 (Fox).Surfing through this broad range of channels isn't easy for off-air viewers, but withno other choices, they somehow manage to find them all.

Cox Cable, however, has decided to make it easier for itsviewers to find these channels -- a consumer-friendly approach to the channels that arefar and away the most-watched and most popular. Although Cox Cable has about 80 activechannels, all of the major broadcast-network affiliates have been clumped between channels2 and 15.

All but one, that is: WVBT, the Fox affiliate, remains onchannel 43. Fox 43 has been exiled 30 channels away from the other off-air stations,nestled attractively between TV Guide Channel and C-SPAN and C-SPAN2, which, in turn, arenext to four government/educational-access channels and two home shopping channels.

During retransmission-consent negotiations, Fox 43 hasasked Cox Cable for nothing more than equal treatment. It asked to be located not inpublic-affairs Siberia, but in the same VHF channel neighborhood as its over-the-aircompetitors.

Cox Cable has flatly refused to even consider thispossibility, despite the fact that the other channels in the VHF band are currently filledwith such nonlocal fare as WGN and Animal Planet and such seldom-viewed fare as alocal-access (read: infomercial) channel.

Yet Cox Cable apparently thinks its subscribers appreciatethe convenience of having all of the major networks in the same channel neighborhood. And,as its advertising materials demonstrate, Cox's exclusive access to local stationshas been its primary weapon in beating back the competitive challenge of DirecTV Inc. andEchoStar Communications Corp. Why, then, has Cox chosen to discriminate so flagrantly andso obstinately against WVBT?

Is it because of contractual carriage obligations to theexisting VHF-band occupants? Clearly not. While Cox may have contractual obligations tosome of the services it carries in the VHF band (it won't say which), it has admittedthat there are several services with no such obligation, including WGN and Animal Planet.Nor is there any contractual or franchise requirement that its local infomercial channelbe on channel 11.

Could it be significant that last fall, WVBT initiated thefirst 10 p.m. local newscast in the market? Could it be that Cox is attempting to suppressthe first competitor in that time period to Cox's local cable-news channel, locatedon channel 4 despite infinitesimal viewing? Dramatic confirmation of this thesis arrivedlast week in the form of a full-page ad in the local paper touting Cox's local newschannel as "Now the only 10 p.m. news" in the Norfolk market.

Cox, of course, denies that there is any anti-competitiveintent in its actions. But it will not say why it refuses WVBT's modest request. Itsimply repeats over and over again the grand principle that Cox will "not allow Fox43 to set Cox's channel priorities" or "to determine Cox's businessplan." And Cox has summarily rejected Fox 43's offer to restore its signalimmediately if Cox will engage in binding arbitration.

Is it really Cox's business plan to make it easier forNorfolk viewers to see the Chicago Cubs than the Washington Redskins? Do the Cox marketinggurus advise that reruns of Knight Rider, Matlock and Lassie shouldbe easier to find than Ally McBeal? Is it Cox's view of community service tofeature WGN's News at 9 more prominently than the only local broadcast news at10 p.m.?

It should be obvious that WVBT is not trying to reviseCox's channel priorities or to determine Cox's business plan. It is not evenasking for reasonable compensation for its enormously valuable property.

WVBT is simply asking Cox to implement its own professedchannel priorities and its already demonstrated business plan in a fair, nondiscriminatoryand pro-competitive manner. WVBT is asking for something far less disruptive and far lessdestructive to Cox's programming autonomy than countless other retransmission-consentdeals Cox and virtually every other cable operator has done, where the compensation forlocal station carriage is carriage of one or more additional cable networks.

Cox's behavior is classic monopolistic bullying. Giventhe prospect of broadband competitors and local-into-local satellite services, this is thekind of story we will hear infrequently, if at all, in the future.

And with Cox losing $5,000 in asset value every time asubscriber disconnects -- and these days, they disconnect forever -- one has to wonderjust how much Cox will sacrifice to avoid dealing with the new reality.

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