Updated: Time Warner Cable, Fox Reach Agreement In Principle

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After a fusillade of rhetoric and politicking, Fox Networks Group and Time Warner Cable have reached an agreement in principle on a comprehensive carriage contract.

The pact, terms of which were not disclosed, covers Fox Television Stations and Fox Broadcasting, as well as a number of Fox Cable Networks national services and FSN regional sports networks.
The agreements prevent any disruption of service. The deals expired at midnight on Dec. 31, but the parties -- led by Time Warner Cable executive vice president and chief programming officer Melinda Witmer and Fox Cable Networks president of affiliate sales and marketing Mike Hopkins -- continued to negotiate throughout New Year's Day at Fox Century City lot. Those talks kept the Fox signals on the cable operator's systems; the deal was struck Friday afternoon.

Cutting across all of the properties, the deal covers all of Time Warner Cable's nearly 13 million subscribers, as well as 2.4 million customers of Bright House Networks, on whose behalf TWC negotiated with Fox.

The deal came in time to ensure that Bright House's customers in the Sunshine State were able to see Fox's coverage of the Allstate Sugar Bowl Jan. 1 at 8:30 p.m. (ET), in which the University of Florida routed the University of Cincinnati.
Fox had been seeking up to $1 monthly license for the retransmission-consent for its stations reaching 3.9 million Time Warner Cable subscribers. The high-profile battle had drawn the attention of the Federal Communications Commissioner chairman Julius Genachowski and members of Congress, who did not want their constituents to be disenfranchised from marquee Fox programming.

Fox had originally been seeking $1 per subscriber each month for its television stations. Time Warner Cable's initial response was said to be in the 25 cents to 30 cents range. Analysts and observers suggested the compromise utimately would fall to around 50 cents or thereabouts.

The $1 license fee benchmark, not surprisingly, was the focus of other programmers and distributors, who eyed the proceedings for the precedent it could establish in their future negotiations.

It could not be determined at presstime how much compensation Foc received for its retransmission consent.

"We're pleased that, after months of negotiations, we were able to reach a fair agreement with Time Warner Cable -- one that recognizes the value of our programming," said Chase Carey, deputy chairman, president and COO, News Corp., in a statement.

Noted Time Warner Cable chairman, president and CEO Glenn Britt: "We're happy to have reached a reasonable deal with no disruption in programming for our customers."

Sen. John Kerry( D. Mass.), who had  been one of the more vocal lawmakers about the retrans dispute, said the Hill would be doing some Monday morning quarterbacking to see if any legislation was needed to avoid a repeat of the impasse. Genachowski said the pair had granted a New Year's resolution to millions, while urging Sinclair Broadcast Group and Mediacom Commission, which agreed on New Year's Eve on an eight-day extension, to follow suit and finalize their own retrans deal.

Kerry, who pushed the two sides to extend carriage while they negotiated and pushed the FCC to intervene if they didn't, praised the pact: "I applaud the parties for putting consumer interests first by reaching a new carriage contract, and for staying at the table until a deal was cut."

He indicated his office had been in contact with the parties during the negotiation. "I also appreciate their communications with my office throughout the process," he said. "My sole objective is to ensure that the rules and regulations governing the media marketplace protect consumers. "

But while Kerry sounded relieved that the threat of pulled signals interrupting football games was over, he also suggested that he would be assessing the retrans process to decide whether Congress needs to step in to avoid a repeat performance. "I will reach out to both parties, the FCC, and consumer advocates to assess lessons learned from this dispute," he said, "and what, if any, changes to law are necessary. I again extend my appreciation for a positive outcome to the parties and the efforts that the FCC exerted to bring them together."

Genachowski, who publicly urged Fox and Time Warner to agree to an extension also took time off from his New Year's Day festivities to praise the deal:  "Fox and Time Warner have granted a New Year's resolution of millions of viewers, and I congratulate them."

The FCC chairman also used the opportunity to encourage Mediacom and Sinclair to settle their dispute before the Jan. 8 expiration date on their extension of carriage.

"Now it is the turn of Sinclair and Mediacom to respect the wishes of their audience, and resolve their differences. The governing statute contemplates that retransmission terms should be and will be resolved by agreement between private companies, and broadcast and cable companies must accept shared responsibility for any failure to reach a timely deal," he said.

Genachowski indicated the FCC, too, had something to do with getting the deal done, as well as getting Sinclair and Mediacom to keep the signals on. "I commend the FCC's Media Bureau for its yeoman, pragmatic, and consumer-focused work in encouraging yesterday's extension of the Sinclair/Mediacom retransmission agreement as well as today's Fox/Time Warner agreement," he said.

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