Showdown in Chi-Town?


The cable industry descended upon the Big Apple last week to attend a troika of events that seemed like a dress rehearsal for the upcoming National Show in the Windy City.

The cable guys descended on New York largely to support Cable Positive, which held its annual fundraising event to fight AIDS. This year, the group honored Black Entertainment Television founder Bob Johnson and the network's president and COO, Debra Lee.

Some 600 plus attendees also came to Multichannel News' third annual Wonder Women lunch, an affair the newspaper co-hosts with the New York chapter of Women in Cable & Telecommunications. We heartily thank you for your support of WICT's and our efforts to raise the boats of all women in cable.

Trust it to say, there were also numerous private breakfasts, lunches, dinners and cocktails that week, as an industry that loves to bond did just that.

But one dangerous topic came up often, but in near-hushed whispers, at all the events and personal meetings I had that week. That was the perilous state of programmer-operator relations.

That tension has always existed between programmers and cable MSOs. But this year, the pitch of discord has escalated alarmingly.

MSOs are still bemoaning the carriage terms that the Yankees Entertainment & Sports Network won from New York City-area cable operators, as well as yet another 20% increase from ESPN. Plenty of sidebar discussions around Manhattan last week kicked around the pros and cons of sports tiers.

But the programmers had some beefs of their own. With its acquisition of AT&T Broadband, they said, Comcast Corp. has been acting like an 800-pound gorilla, revisiting its programming contracts — particularly with networks whose deals have lapsed.

And another new wrinkle reared its potentially ugly head last week. If Comcast is Goliath, then there's Adelphia Communications Corp. — now the David, as it operates under bankruptcy. A new management team there is also revisiting its programming contracts, and is throwing around its new-found weight — the protection of U.S. bankruptcy laws.

Unlike Comcast, Adelphia owes programmers millions of dollars, so it's no surprise there that it wants to negotiate better terms for itself as it crawls out of the deep hole it's in.

This new level of angst is likely to be the backdrop at the National Cable & Telecommunications Association's convention in Chicago in early June.

Like any industry, the NCTA uses its annual meeting largely as a public-relations event to tout how robust and healthy the industry is, giving updates about the rollout of new broadband services and issuing promises of more great new stuff to come.

The show not only attracts buyers and sellers, but regulators and pinstripers from Wall Street. Like I said, it's a platform to tell cable's positive story.

But that will be challenging, with Adelphia, Charter Communications Inc. and Time Warner Cable now under the microscope for their various accounting practices.

Layer on the heated tempers of programmers and operators, and what you have is a recipe for controversy.