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CBS, Time Warner Cable Reach Carriage Deal

CBS Time Square Advertisement Anti TWC - H 2013

Programming is set to begin at 6 pm ET.

A month after it began, CBS Inc. and Time Warner Cable have resolved their bitter retransmission consent dispute. CBS channels, including Showtime, will return to TWC's systems at 3 pm PT/6 pm ET.

With the football season looming, there has been widespread anticipation of some kind of settlement. Whether or not football was the final trigger, CBS has shown the power of its content. This will not be the last time it reminds a cable or satellite company of how much influence it has over viewers.

CBS set out in this negotiation to get what it considered a historic adjustment, which would value its content as highly as that of cable channels such as TNT and USA. Time Warner Cable initially took the position that it was an unreasonable raise and that it would not pay.

By last week, it became clear that TWC would pay, and the talks moved to issues that didn’t even exist the last time a deal was negotiated, including TV Everywhere (the ability to watch programming on mobile devices) and a range of digital rights.

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In a memo to CBS employees on Sunday, CBS CEO Leslie Moonves said: “This was a far more protracted dispute than anyone at CBS anticipated, but in spite of the pain it caused to all of us, and most importantly the inconvenience to our viewers who were affected, it was an important one, and one worth pursuing to a satisfactory conclusion. That has been achieved. The final agreements with Time Warner Cable deliver to us all the value and terms that we sought in these discussions. We are receiving fair compensation for CBS content and we also have the ability to monetize our content going forward on all the new, developing platforms that are right now transforming the way people watch television.”

In a press release on Sunday, no terms of the settlement were announced -- not even how long it would run. But TWC did say that it now includes Showtime Anytime and VOD, as well as returning channels in New York City (WCBS and WLYW), Los Angeles (KCBS and KCAL) and Dallas/Ft. Worth (KTVTY and KTXA). Showtime will also return to TWC subscribers nationwide.

There was no mention of TWC getting TV Everywhere rights, which would allow it to distribute an app to its subscribers so they could get CBS channels on their mobile devices.

A statement Sunday from TWC CEO Glenn Britt was reserved: “We’re pleased to be able to restore CBS programming for our customers, and appreciate their patience and loyalty throughout the dispute. As in all of our negotiations, we wanted to hold down costs and retain our ability to deliver a great video experience for our customers. While we certainly didn’t get everything we wanted, ultimately we ended up in a much better place than when we started.”

Britt, who is due to retire at the end of this year, took a shot at the whole concept of retransmission consent, which allows broadcasters to demand ever-increasing fees to carry their shows on cable and satellite.

“We are also encouraged by the 50-plus consumer organizations and legislators that supported our call for Congress and the FCC to reassess the 1992 retransmission consent rules,” he said. “The rules are woefully out of date, and are the primary reason cable bills are rising, and too frequently leave our customers without the programming they love. We sincerely hope that policymakers heed that call and take action to prevent these unfortunate blackouts soon.”

The announcement notes that the agreement also covers Bright House Networks, which is controlled by TWC.

The carriage agreement also covers CBS Sports Network, even though it was never blacked out by TWC.

TWC has promised Showtime pay-channel subscribers a rebate (estimated to be around $20), but it will not compensate anyone for the CBS channels, including WCBS and KCBS. That has brought about at least one class action suit against TWC for the loss of service it promised.