TW Cable, Gotham lock horns over new channels

NEW YORK — Time Warner Cable and the city of New York may be headed for a major dust-up over the city’s claim on three of the 12 channels that TW will add to its cable system in Manhattan this fall.

Lorna Goodman, an attorney with the New York City corporation counsel’s office, said that “we get 20% of all of the channels on the system for PEG purposes,” based on the city’s franchise agreement with Time Warner Cable’s Manhattan system.

PEG is the acronym for public, educational and governmental, and Goodman said the city will demand three of the 12 new channels — or 25% — because the rules say she can round off to the higher, not the lower, figure. (Two of the 12 adds up to only about 17%.)

The key TW executives who deal with the corporation counsel — Barry Rosenblum, president of TW Cable of NYC, and Dick Aurelio, a full-time TW consultant and former president of TW Cable of NYC — said the city is not entitled to any new channels.

“The city has lost in court,” Aurelio said, “so now it’s laying the gauntlet down to try to get more channels when we complete our franchise renewal” in mid-1998.

Aurelio is referring to the decision by a federal appeals court July 3 upholding a lower-court opinion that stopped the city from forcing the Fox News Channel onto one of the PEG channels the city already controls.

The city’s conflict with TW is part of an even bigger dispute between TW and Rupert Murdoch’s News Corp., which is pursuing an antitrust suit against TW that’s now in discovery and could end up in court in January 1998.

Murdoch is claiming there was only one reason why TW Cable of NYC reneged on a verbal agreement to carry his Fox News Channel: Ted Turner did not want competition for CNN and CNN Headline News, two of the jewels in TW’s cable-network crown.

TW denies Murdoch’s charge, claiming that its Gotham system takes MSNBC, another competing all-news channel, which TW chose over Fox News Channel in a straightforward business decision.

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