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Cablevision-ABC standoff ends, TV-hostage risks remain

Cablevision subscribers in New York, New Jersey and Connecticut got WABC back just in time to watch the Oscars last night. But the cease-fire in the argument over how much the cable operator should pay for the right to retransmit the Walt Disney Co.-owned station's programming came way too late to leave TV subscribers feeling comfortable.

There's much to dislike about this corporate slap fight. Cablevision subscribers lost programming for which they pay ever-increasing sums--and did so just in time for one of the bigger viewing nights of the year. Some may have been able to work around the disruption by watching WABC over the air and others took advantage of timely promotions to switch to Verizon's Fios service. A few had to seek more drastic remedies: My onetime Post colleague Bill Frischling trained a webcam on a TV so his mother could watch via a Skype videoconference.

Even non-subscribers, in turn, had to put up with the irritating spectacle of two for-profit companies acting as if each was uniquely devoted to helping viewers and the other kicks puppies for fun. (In a fit of passive-aggressive behavior, Cablevision even switched viewers' cable boxes to display an ad denouncing WABC's conduct--yet another reason to end cable operators' control of viewing hardware.)

WABC and Cablevision did not reveal the terms of their settlement--though presumably it will involve Bethpage, N.Y.-based Cablevision paying something less than the $1 per viewer, per month that the New York broadcaster had reportedly demanded.

We're only going to see more of these squabbles and standoffs as networks step up their demands for higher retransmission fees. Just since the start of this year, subscribers of Bright House Networks and Time Warner Cable each each almost lost Fox's channels; customers of Mediacom retained access to Sinclair Broadcast Group's stations just in time to miss college football's BCS championship game; and Cablevision viewers couldn't watch such Scripps Networks channels as HGTV and Food Network for about three weeks in January.

Viewers can and should be irate at being used as human shields in this manner. But if they can't change to a competing service--or if early-termination fees make it financially painful to switch--what can they do on their own to resolve these hostage situations?

I have to wonder if these carriage disputes don't expose a broader flaw in the pay-TV business model. When networks and stations can demand greater payments from subscription services--but the people who ultimately pay for higher retransmission fees don't see those exact costs, much less get a chance to vote with their wallets for or against companies seeking these fee increases--you have a situation that can look like a case of market failure.

Have you come close to losing access to a channel because your TV provider and the channel's owner couldn't settle their differences on time? (If you actually lost the channel, did you get a refund to compensate for the inconvenience?) How did the experience make you feel about the reliability of your TV service?

By Rob Pegoraro  |  March 8, 2010; 12:18 PM ET
Categories:  Policy and politics , TV  
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Comments

I live in the Los Angeles area. I have Time-Warner cable service (including internet access). Last New Years, TW and Fox had their dispute about carrying channels, that was 'resolved' some time on Dec 31.

My big question is: Why does ABC (NBC, CBS, etc) expect/demand payment for any cable system to re-transmit their signal. The cable systems pick the signal off the air, feed it to their systems, and the viewers (who pay money for the service) get to watch their content. The cable service fees (whether you agree with the amounts or not is another issue) pay to maintain the equipment, billing, customer service (?), provide funds for upgrades and yes, even some profit for the cable system. The network, with absolutely no out of pocket expenses, get many more viewers than they previously had.

I was reading the WABC website comments last night. Overwhelmingly, the comments were critical of ABC/Disney for pulling this stunt on their viewers, especially on Oscar night. Many commented that the OTA digital signals were not working in their area, (thanks for the switch) and that there was little notice that ABC would actually be off the cable system on Sunday. Many people live in apartments where FIOS is not available, nor are they able to put up a satellite dish, and OTA didn't work.

I have no real problem with the content providers asking for payment for the non-over the air programming (ESPN, History Channel, etc), but the OTA should be carried free. If the cable system modifies the signal (inserts its own ads, etc.) then there needs to be some discussion.

The cable subscriber has no voice in what happens with their service. Like you said, many cable franchises are sole-sourced in a community. Satellite is not an option for many. FIOS isn't available everywhere. AT&T U-verse is also not available everywhere. Maybe the local franchising authority needs to get heavily involved in this matter. The franchising group is supposed to be looking out for the members of the community it serves, not the network nor the cable company.

Posted by: blasher | March 8, 2010 12:44 PM | Report abuse

Blasher's comment contains what I feel, but I'll add one more thing -- the charge for broadcast cable was lowered a great deal via federal regulation a few years back (with the rest of service being heavily deregulated, resulting in much higher prices for non-broadcast services). So broadcast networks pointing out this heavily regulated amount as some cable company rip-off is an outright lie -- it really is the price for the cable hookup, not the content.

I have to say I don't quite comprehend that the local affiliate (WABC) would go along with Disney pulling the signal -- it would mean an instant drop of, what, 40% of their entire audience? How long could ABC play chicken while users were getting over seeing Bill Ritter while getting used to Sue Simmons? Seems pretty dangerous to me.

And even though there are certain live events like the Oscars that would prove a major headache, most prime-time fare is available after the fact on abc.com as far as I know -- so what would we really be losing?

Posted by: balto20 | March 8, 2010 1:45 PM | Report abuse

WABC is probably a network owned station. They're not going to say no to the corporate bosses.

Are the carriers in support of ala carte channels? If not, are the increasing incidents (Versus-DirectTV still going strong) changing their minds?

Posted by: koalatek | March 8, 2010 2:41 PM | Report abuse

"kicks puppies for fun."
Don't knock what you haven't tried!

There's lots of programming OTA, although ch4 has been flakey lately, and online.

Posted by: wiredog | March 8, 2010 3:21 PM | Report abuse

Hey wiredog, glad to know I have company on the Ch 4 thing. I went through all the mojo..rescan, change the antenna channel/direction/orientation and it's still an unstable picture. After the conversion it was clear as a bell with a few minor adjustments. I had so much confidence it was dialed in I made a mark on the antenna for the best reception...no dice now

Posted by: tbva | March 8, 2010 5:46 PM | Report abuse

There is a "must carry" federal rule (FCC) that the local stations litigated a few years back, especially with the satellite companies. Now that they won the "must carry" rule, why should they get paid for free over the air TV. It the station was subscription only, then they should charge. They want their cake and eat it too. Also, Federal rules do not allow local governments to regulate or intervene in most cable issues.

Posted by: dprisock | March 8, 2010 7:34 PM | Report abuse

I'm not sure an early termination fee would apply if a provider could be claimed to have materially breached the contract by dropping a major service. I stared down a cellphone company on this years ago.

Posted by: jmcharry | March 8, 2010 7:44 PM | Report abuse

Why would anyone care about this other than subscribers?

There is nothing to like about either of them, but I found it distasteful that people wanted the government to interfere in a private transaction.

So you wouldn't watch the Oscars. I can't imagine why you'd actually care.

I was hoping the cable company would stand firm, because frankly, all this content is available for free over the internet.

If they won't sell it to you, grab it off the internet.

Posted by: Ombudsman1 | March 8, 2010 9:52 PM | Report abuse

This "can look like a market failure"? Really? Since when has cable television operated in the free market. You're forced to either buy all the channels or buy none. You always have been. Cable television is the definition of market failure. If this country actually cared about antitrust law anymore the DOJ would force the networks and cable companies to allow subscribers to only buy what they want. I won't hold my breath waiting for that to happen.

Posted by: bill3 | March 8, 2010 10:23 PM | Report abuse

I can honestly say that i have not turned my television on in at least three months. And frankly I don't miss it one iota. I gave up on commercial television programming when there were just endless reality shows one right after another. And the 'pop culture' fluff that is now morning shows like Today and GMA makes it no longer worthy of turning on the television when i can just sit in front of my laptop with my cup of coffee and get real news, weather, sports scores and anything else that interests me. I'm probably going to drop my cable subscription when i move to a new apartment and just go with DSL internet. Cable has just become a money-grubbing monopoly and I no longer wish to support its greenback diet.

Posted by: dlpetersdc | March 8, 2010 10:57 PM | Report abuse

The antenna in my attic picks up HD channels from as far as Baltimore (50 miles away) for free. I have that going into the RF input of my TV, and the cable box feeds the composite input (since I have no interest in paying the cable company extra for HD channels). No problems here if they decide to stop carrying broadcast channels...

Posted by: Chalres | March 8, 2010 11:30 PM | Report abuse

Pre Oscars went on FaceBook Well, then hoped for Oscar show didn't materialize, finally kindly Poster Posted Link to sKynet.tv from England & played oscar ceremony back to US. As that disintergrated, as NOT Legal to send broadcast to US from England, switched over to WWF World westling Fed Channel & finished Up Oscars.

too Bad so Much ado Over Nothing.

Signed:PHYSICIAN THOMAS STEWART von DRASHEK M.D.

Posted by: thomasxstewart1 | March 8, 2010 11:38 PM | Report abuse

ABC/Disney will go after Time Warner next. My carrier. We only have two companies here and they can't operate in each other's areas. Yeah, what competition? I don't give a flying fig about the so called major networks. I wish they would make some of them premium channels so we could skip them. Since this will never happen, my contract is up next month and I already called to cancel.

Posted by: Emaleth | March 9, 2010 12:57 AM | Report abuse

I'm in a Brighthouse part of Florida where we recently listened to the Fox posturing.

I think we'll be giving up on cable TV before long. It's expensive and the commercials on most channels have gotten so numerous and intrusive that you can't really watch anything live anymore.

So: Outdoor antenna (we live in a fringe reception area) and more Netflix movies for now, later a MythTV and/or "Hulu player" box made from an older P-4 PC I have sitting around, ought to deal with most of our entertainment "needs."

Verizon FIOS? By the time you add in all the little extra fees and such, it is crazy-expensive here, way higher than Brighthouse.

Sorry, premium TV industry. You have gotten too rich for proles like us.

Posted by: roblimo | March 9, 2010 7:25 AM | Report abuse

I'm in Indianapolis & a couple of years ago Brighthouse(franchised for "old city limits" carriage only, Comcast gets the rest of the county) went through this with CBS, including the "how to connect an antenna spots". It was "pre-DTV conversion", so I used analog OTA to watch/record those shows-bought a switch to go between cable & OTA antenna. I have long since "ditched cable"(down economy, rising costs) & now use Hulu, the networks' & other sites as well as OTA/DTV boxes on a couple of TVs. I've found there's not much I can't watch, that I want to see. I have 6 MB/s DSL service with AT&T with an 802.11n Wi-Fi network & 3 Macs, a couple of which are connected to TVs--1/main system(17" iMac Core Duo w/ external HDDs to HDTV + 5.1 sound system)=media server(DVD & CD rips) & MacBook I sometimes connect in my bedroom. NMCFM=no more cable for me!

These carriage issues are going to be recurring & only get worse, in some cases local affiliates are being required to pay the networks-how is that not just plain greed!! Consumers will get bigger & bigger dings in the wallet. I see this the same way I see cities/taxpayers being held hostage by pro sports teams--we need a bigger stadium in order to have more/bigger private suites(=to make more $$, we need your $$), so we can get the best draft picks/free agents(= to make more $$, we need your $$), so we can pay them $10 million per season(= to make more $$, we need your $$), so the city can be a "tourist draw"(= to make more $$, we need your $$) & if the city/taxpayers don't give it to us we'll leave(screw you people we said we cared about, that supported us for years. even when we kept losing)--'cause the team/owners only care about making $$ & lots of it. Just as it takes a couple weeks salary to take a family of 4-5 to an NFL/NBA/MLB event w/out nosebleed seats, it's taking a bigger & bigger chunk for people to enjoy basic programming in their homes-channels that used to be included as basic are now offered in tiers & require a digital box(= to make more $$). I know, nobody has to watch TV--we could read a book or listen to radio, I do both so, irrelevant argument. People want to watch whatever they want to watch--NBA, Xtreme sports, HGTV, Lifetime, whatever... & thanks to the technology they can. In addition there are things we need to watch-say an impending storm or our governments(local & national) in action, where we can see how they vote/act on this & other issues. Thing is, you shouldn't give/provide people with something & then take it away. You especially shouldn't take it away to pay crazy large salaries to people who "play" a game or "play-act" or to those who manage or oversee those who do, that's just wrong. And what about the advertisers... aren't the networks contractually obligated to provide viewers in these locales? They should also be hopping mad.

Posted by: dkjazz3 | March 9, 2010 8:57 AM | Report abuse

I live in Garrison, New York and receive cable service from Cablevision. You correctly report that Cablevision stopped transmission of Scripps Network broadcasters for several weeks in January, allegedly because of a dispute over the fee Cablevision was charged and again interdicted ABC broadcasts on Sunday, March 7. In each case, we were bombarded by print ads from each side about the unthinkable greed of the other and by Cablevision's electronic ads with the same message.

Nowhere, of course, was it mentioned that Cablevision sells a service to television viewers (who are unable to receive adequate service otherwise) by rebroadcasting content developed by others AND they are paid for that service. Why should Cablevision not be required for the material it rebroadcasts for a fee? FURTHER, why are we viewers obliged to accept Cablevision as a supplier? There are dozens of cable providers ready to supply their service yet we consumers are hostage to the unreasonable manipulation of Cablevision because it is not required to compete in the market for our business. As a result, Cablevision (and presumably other suppliers) (1) are free to raise and lower their prices without sanction and the public has no remedy other than to drop cable service; (2) forces its subscribers to accept bundles of broadcasters whether they want them or not in order to receive the transmissions of broadcasters it is paid to transmit; and (3) drops and adds broadcasters at will without regard to what its customers want.

When Cablevision dropped the Scripps channels, I protested to a Cablevision representative that I was being billed at the same rate I had been charged while the Scripps channels were included. The Cablevision representative's response was that the company had added other broadcasters of equal or better value at no extra charge. The arrogance of an industry that is permitted to obtain subscribers with bait-and-switch tactics and then explain its action with a patronizing father-knows-best response is unacceptable. The fact is that Cablevision forces us to accept the broadcasters which pay Cablevision the highest fees (or charge Cablevision the lowest fees)or which carry content - political or otherwise - that Cablevision or its supporters want to convey.

This is a dangerous model - particularly for the information industry. Whatever political agencies are charged with assigning monopolies to one cable supplier or another in a geographic area must be controlled. The consumer must be able to select the broadcasters it wishes to allow into its home and must be able to select the cable provider that it considers to be the most competent and the most reasonably priced.

The cable providers argue that their monopolies in various markets are not anticompetitive because there are other industries providing the same services, eg, telephone companies, personal television antennae and satellite dish providers. This is like arguing that Ford should be allowed to provide all the automobiles in certain counties because folks who don't like Fords always have the option of public transportation or simply walking. It is specious. If the cable companies want my business, they should be required to compete for it. The fact that they are being given a reprieve from obeying the laws of the marketplace tells me that an unsavory pact has been made between this industry and those we elect and hire to regulate our commercial interests. It's past time to put a stop to this inequity. If we don't, the cable suppliers will use every public event like the World Series or even National Elections to manipulate the public and their consumers by refusing to retransmit the material.

Posted by: btnewton3 | March 9, 2010 9:51 AM | Report abuse

This is WHY the Comcast/NBC Universal deal should be STOPPED!!!

It's the Consumer in the end who will end up paying & paying for this venture. You would think that Comcast would pay but in the end it's the subscribers who will PAY THE HUGE PRICE...TIME TO SWITCH TO DISH TV AND KISS CABLE RIPOFF TV GOOD BY FOR EVER!!!

Posted by: imZandor | March 9, 2010 10:30 AM | Report abuse

This is ridiculous. The broadcast stations are not providing anything to cable services -- rather the reverse. It is the cable services that are expanding the audiences of the broadcast stations, increasing their ad revenues by increasing their viewership.

Broadcast stations are common carriers, licensed by the government. They do not have a right to hold their audiences hostage in return for ransom. It is they who should be paying the cable providers for the additional viewers they receive over the cable providers' infrastructure, not the other way around.

This problem comes up for someone every time a significant event, like the Oscars or March Madness, is broadcast over the air. Some meathead at the TV station decides that some customers should pay for the privilege, and tries to exact his pound of flesh from the cable providers, who in turn take it from the cable customers.

I hope that the advertisers at WABC recognize that WABC's actions diminished the audience for their paid spots and demand a refund.

This has GOT to stop. The cable providers have GOT to stand their ground and stop negotiating with these hostage-taking terrorists at the licensed common carriers.

Posted by: FergusonFoont | March 9, 2010 10:47 AM | Report abuse

Sorting this mess out starts with information.

Congress can pass a truth-in-cable law that requires cable and satellite providers to itemize the monthly license fees that it pays to each channel on behalf of the subscriber.

Call those license fees what they really are: private taxes. Because whether you watch or not, you still pay.

Posted by: mattintx | March 9, 2010 11:06 AM | Report abuse

"My onetime Post colleague Bill Frischling trained a webcam on a TV so his mother could watch via a Skype videoconference."

Not that I'm against this morally, but legally I'm not sure you want to write about that in a column. This is may be an illegal rebroadcasting and it would not be beneath Disney (owners of ABC) from suing for such a thing.

Posted by: anti-elitist | March 9, 2010 12:05 PM | Report abuse

Cable TV is no different from internet and even voice. The fact that there are different pricing schedules is a historical remnant.

The cable companies should charge a reasonable fee for the connection, and a very small charge based on packets - regardless of content. And consumers should be free to buy whatever - and only whatever - content they wish from the providers.

Posted by: AlibiFarmer | March 9, 2010 1:46 PM | Report abuse

Yet, neither company is offering to reimburse consumers for content that was paid for but not delivered. They'll get away with it too, which is even sicker.

Posted by: Nymous | March 9, 2010 5:27 PM | Report abuse

What about DirecTV and Comcast-owned Vs.? Seems like that has been going on forever.

Posted by: Section315 | March 9, 2010 6:06 PM | Report abuse

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