No material progress made during Sunday negotiations

Spin war as stations go dark

Execs from Cablevision and Fox ended their meeting on Sunday with no resolution to the carriage dispute that has left three million subscribers in Philadelphia and Gotham without Fox stations.

According to sources, no material progress was made in today’s meeting. But execs did agree to meet again on Monday.

This was the second day of negotiations that began hours after Fox’s stations went dark on Cablevision systems when the previous carriage deal expired.

Fox played serious hardball on Saturday in blocking Cablevision broadband subscribers from accessing programming on Fox.com and Hulu.

A source familiar with the situation said Fox took that step in an effort to maximize its leverage with Cablevision, but backed down after it became clear that the move would cause major strife in Washington, where Congress and the FCC are already in the midst of setting net neutrality and broadband policies. Such manipulation of consumers’ broadband access is exactly the type of action that net neutrality, endorsed by the FCC and Obama administration, is designed to prevent.

Cablevision broadband customers were blocked from accessing Fox.com and Hulu for hours on Saturday but all access was expected to be restored by Saturday evening, a source said.

Ed Markey (D-Mass.), raised a red flag about Fox’s broadband-blocking step in a letter he sent to FCC chief Julius Genachowski Saturday urging him to bring the companies to the FCC and have the commission “broker an agreement.” The FCC “needs to actively defend Internet freedom and consumer rights,” Markey wrote in reference to Fox’s broadband-blocking move.

“Fox has sunk to a new low in its bullying tactics, blocking Cablevision customers from accessing Fox and Hulu websites,” said a statement from the American Television Alliance, a coalition of cable operators, including Cablevision, satcasters and telco operators that is pushing the FCC and pols to make major changes on the law governing station retransmission agreements.

The loss of the Fox’s WNYW and WWOR New York and WTXF Philadelphia. via cable comes just as WNYW carried Saturday’s start of baseball’s National League Championship Series and Sunday’s Detroit Lions-New York Giants football game.

The contract fight has been heightened by the intensity of the public spin war waged as the companies make their cases to viewers in the New York, New Jersey and Connecticut area. (Cablevision systems also serve outlying areas of the Philadelphia market.) Genachowski let the companies know in a statement issued Saturday ayem after the shutdown that he’s keeping a close eye on the dispute and that he expects the companies to “live up to (their) responsibility” to consumers.

Cablevision has sought to push the FCC to mandate that the station signals stay up while the sides engage in third-party binding arbitration to reach a deal.

“We have accepted the bipartisan calls from scores of political leaders to reach a fair agreement, and demand that News Corp. also agree and immediately return its Fox programming to Cablevision customers,” Cablevision said in a statement Saturday afternoon.

The FCC has stopped short of such a mandate, but undoubtedly the shutoff of the stations — the latest in a string of programmer-operator carriage battles this year — will increase the political pressure on the commission to act.

Sen. John Kerry (D-Mass.) issued a statement Saturday morning vowing to introduce legislation to ensure that station signals would not get yanked during retransmission consent negotiations.

Kerry’s proposed legislation would call for the FCC to determine whether good-faith negotiations were taking place, and it would call for the sides to publicly disclose the terms of their last best offers before signals could go dark. Broadcasters, naturally, would be sure to fight tooth and nail against this legislation. Kerry, who has been a vocal critic of the existing retrans law, cast the issue as a question of consumer protection.

Cable, satellite and telco operators have already joined forces in a petition pending at the FCC to overhaul the nearly 20-year-old retransmission consent law mandating that subscription TV providers reach agreements with local broadcast station owners for the right to carry their signal. The petition filed in March by the coalition dubbed the American Television Alliance urges the commission to bar broadcasters from pulling their signals while negotiations are ongoing.

Fox has steadfastly resisted calls from local pols and others to take the fight to arbitration, saying that matter should be settled through private negotiations.

Cablevision is running a three-minute video on the slots previously dedicated to WNYW and WWOR emphasizing that the decision to yank the stations “was News Corp.’s, not ours.” It also accused Fox of engaging in “an attempt to extort unreasonable and unfair fee increases” for the stations.

Fox is believed to be asking for a retransmission fees that would start at about 50 cents and escalate to nearly $1 per subscriber per month over the course of a five-year agreement — similar to the terms Fox struck with Time Warner Cable after a negotiation that went down to the wire on New Year’s Day but did not result in an interruption in carriage.

Cablevision maintains that Fox is asking for more coin that the cabler pays to carry the local stations of ABC, CBS, NBC and Univision combined.

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