Time Warner Cable: CBS Refused a Contract Extension of up to One Year

CBS's Cube in New York's Times Square encourages customers to contact Time Warner Cable.
CBS's Cube in New York's Times Square encourages customers to contact Time Warner Cable.
 

In the war of words following the blackout of CBS TV stations on Time Warner Cable systems in cities from Boston to Los Angeles, Time Warner fired back late Friday afternoon.

After a series of statements and moves by CBS charging Time Warner Cable's actions were "ill advised" and will hurt both "viewers" and TWC itself, the nation's second-largest cable system operator says it was willing to extend the existing contract as much as a year, but CBS declined.

For its part, CBS in a statement earlier in the day expressed its frustration with the stalemated negotiations and the extensions of the old contract until Friday: "We will also not be subjected to pointless maneuvers like a series of one-hour extensions and mini-drops that do nothing for either side but annoy our viewers."

CBS said it has not yet responded to the TWC claim that they offered a full year extension but in a statement did say: "We prefer not to wait a year to be fairly compensated for our programming. Resolve not defer."

TWC suggests the delays in doing a deal are a negotiating strategy by CBS.

"CBS is trying to delay this negotiation right up to NFL season, which is not fair to our customers," says TWC in a statement sent to the press by spokesperson Maureen Huff. "We’ve accepted numerous extensions at this point, but it’s become clear that no matter how much time we give them, they’re not willing to come to reasonable terms."

CBS charged in a statement right after the blackouts started that "throughout this process, Time Warner Cable has conducted negotiations in a combative and non-productive spirit, indulging in pointless brinksmanship and distorted public positioning -- such as the fictional and ridiculous 600 percent increase CBS supposedly demanded -- while maintaining antiquated positions no longer held by any other programming distributor in the business."

TWC said in its earlier statement that it is fighting hard to keep prices down for its customers. On Saturday, DirecTV offered a statement in support of the TWC position: "Just like the characters in CBS’ Under the Dome, all pay TV customers are feeling trapped and helpless as broadcasters expect them to absorb ridiculous rate increases for the exact same programming. In trying to protect our own customers, DirecTV has certainly had its share of these battles, so we applaud Time Warner Cable for fighting back against exorbitant programming cost increases. We are also appalled to learn that CBS is now punishing DirecTV customers, who may happen to have Time Warner as their Internet provider, by denying them access to CBS content online. The conduct of content companies in their efforts to extract outrageous fees from distributors and consumers may have reached a new low.”

The DirectTV statement is a reference  a move by CBS that effectively blocks all of the cable company's broadband customers from accessing shows for free on the CBS website. That happened Friday only an hour after the talks broke down and the CBS channels went dark. TWC has condemned that action by CBS. 

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"CBS has shown utter lack of regard for consumers by blocking Time Warner Cable’s customers," says TWC, "including our high-speed data only customers, from accessing their shows on their free website."

CBS responded to The Hollywood Reporter: "If Time Warner Cable is a customer's Internet service provider, then their access to CBS full episode content via online and mobile platforms has been suspended as a result of Time Warner Cable's decision to drop CBS and Showtime from their market. As soon as CBS is restored on Time Warner Cable systems in affected markets, that content will be accessible again."

Ironically, TWC then goes on to say that the reason this is unfair is that CBS "enjoys the privilege of using public owned airwaves to deliver their programming -- they should not be allowed to abuse that privilege."

This is ironic because CBS is still available for free on the public airwaves in New York, Boston, Los Angeles, Dallas and other affected markets. It is only off the air for those who pay TWC to be subscribers.

TWC says it has not told CBS the content it buys must be exclusive to them: "In response to the source talking to many people who is saying that Time Warner Cable was asking CBS not sell its programming to new entrants such as Netflix, Intel or Sony: That’s false."

TWC also made it clear that their paying customers will not get any rebate for the loss of the CBS channels: "CBS is carried as part of a programming package, and the pieces of that package change from time to time -- sometimes we add channels, and sometimes we drop them.  We do not make it a policy to credit customers for any individual channel change, because the whole package continues to provide value."

However, TWC says it will credit those who pay for Showtime, TMC and Flix pay channels. Those customers, says TWC, "should expect to see a credit for those channels in an upcoming bill. The credit will be retroactive back to the first day of the Showtime/TMC blackout. They will be credited based on the number of days those channels are not available to them."

However, in an e-mail to subscribers, TWC says within 48 hours its customers in New York, Los Angeles and Dallas will "see temporary replacement programming from Starz Kids and Family."

TWC also told subscribers if they get TWC, they can now have free access to Encore; and if they subscribe to the pay service Showtime, they can now have free access to the Starz channel during the blackout. 

"We deeply regret being forced into this position by CBS," TWC told its affected subscribers, "but we're prepared to stand by our customers and do what it takes to fight these unreasonable demands."

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