Fox, Cablevision Finger-Pointing Continues in FCC Filings

NEW YORK - Late Monday, News Corp./Fox and Cablevision Systems said they have filed information that the FCC had requested on Friday to evaluate whether they have negotiated over a new station and networks carriage agreement in "good faith."

Their lack of a new agreement has left Cablevision's 3 million homes without access to Fox stations and other programming.

If the FCC concludes one or both sides failed to engage in good faith talks, it can demand they start doing so or impose fines.

Cablevision said Monday that News Corp. has refused to negotiate in good faith by demanding a “take it or leave it” rate for Fox 5, its Fox station in New York, among other things.  It also charged that Fox deliberately timed the deadline to black out TV stations in New York “to ensure that Cablevision customers would be denied access to major national sporting events including Major League Baseball playoffs and the World Series unless Cablevision accepted its ‘take it or leave it’ demands.”

Fox, meanwhile, in its letter to the FCC "respectfully" declined to argue for now whether Cablevision violated its legal obligation to negotiate in good faith, saying such charges won't advance the negotiation process.

Fox also retorted to Cablevision's charges saying that it has negotiated in good faith and never made “take it or leave it" demands.

"For Cablevision to still be making those claims is yet another example of their ploy to secure an advantage through government intervention," it said. "Fox once again calls on Cablevision to stop punishing their subscribers in service of a cynical political strategy and resume constructive negotiations."

The FCC letters contained new color and details on the negotiation process between the two companies since May. For example, Michael Hopkins, president, affiliate sales and marketing for the Fox Networks Group, in the Fox letter said News Corp. president, COO and deputy chair Chase Carey had asked him to provide the FCC with details given his familiarity with the process.

He said that Cablevision responded to a May proposal only in July and "proposed vastly expanded rights for Cablevision and similarly broad restrictions on Fox that would have required us to terminate business relationships with other distribution outlets with which Cablevision competes and would have materially restrained established distribution channels for our content." Some observers took that comment to refer to online video site Hulu, in which News Corp. has a stake.

Meanwhile, Cablevision's letter highlighted that Fox said that it can't lower the price it charges for its broadcast stations for Cablevision, because such a move would trigger a most favored nation clause in a carriage deal struck at the beginning of the year with Time Warner Cable. That means if Fox lowered its price for Cablevision, it would also have to reduce them for TW Cable.

The letters also brought to light that Cablevision at one point suggested the two include the Fox News Channel in the current carriage negotiations instead of dealing with it when its current contract expires in December. But Cablevision said Fox wanted a 44% fee hike for the network.

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