Updated: Time Warner Cable Still Carrying CBS Stations, Cable Networks Amid Clash Over Fees

CBS

Cable operator announced removal of local stations and national networks from lineups, before reversing course at CBS's request

Time Warner Cable — after announcing it was removing local CBS stations in New York, L.A. and Dallas as well as Showtime and three other CBS cablers from lineups nationwide over a breakdown in contract talks — said it was holding off on going dark on the channels at CBS’s request.

Shortly after midnight Eastern, TWC said the “outrageous demands for fees by CBS Corporation” forced the cable operator to remove several of the Eye’s networks and broadcast stations from customers’ lineups.

But after brief blackouts, Time Warner Cable reversed course. At 12:30 a.m. Eastern Tuesday, the cable operator said, “At the request of CBS, we have halted going dark on their channels.” In addition to the local broadcast stations, Time Warner Cable had planned to remove Showtime, The Movie Channel, Flix and Smithsonian Channel. CBS said the two sides “have agreed to continue discussions.”

The about-face came after the companies announced a series of rolling deadline extensions on Monday night. The previous agreement between CBS and Time Warner Cable, struck in 2008, expired June 30 but the companies extended that through Monday at 5 p.m. Eastern — then pushed it to 8, then until midnight in hourly increments — as they tried to hammer out a deal.

CBS-owned stations have not experienced an extended blackout with a pay-TV operator in nearly a decade. Such high-profile outages not only enrage viewers but also invite renewed scrutiny from policymakers looking to put an end to such standoffs.

The major bone of contention in the rhetoric-laden feud is the price increase CBS has sought for the broadcast stations. Currently Time Warner Cable pays between 75 cents and $1 per subscriber monthly for CBS stations, and the Eye has likely been seeking upwards of $2 per sub ramping up over a period of time, according RBC Capital Markets analyst David Bank.

SEE ALSO: CBS Chief Moonves: Time Warner Cable Can Afford to Pay Us More

The dispute erupted into a public war of words earlier this month, even as the companies continued to negotiate. The melee pits CBS, which is intent on grabbing more revenue from pay TV operators, against TW Cable, which is stubbornly pushing back against hikes in programming costs.

In TV and print ads, Time Warner Cable has alleged CBS is demanding more than 600% what the cable operator pays in retrans fees to independent CBS affiliates in other parts of the U.S. — an “unprecedented” premium, according to TWC. The cable company has urged customers to “contact Congress” and set up a microsite at TWCConversations.com with its talking points on the dispute.

“CBS is driving up the cost of cable TV — charging higher and higher prices for shows they give away for free online and over the air,” the ads said. “It’s time to stand up and say no to broadcasters demanding unreasonable prices.”

After TWC said it was pulling the CBS channels — but before the operator backtracked and halted the blackout — the Eye issued a statement that said in part, “In spite of all our efforts to hammer out a fair agreement, Time Warner Cable has dropped CBS and Showtime from its channel lineup effective midnight EDT.  Meanwhile, they continue to engage in a public campaign of disinformation and voodoo mathematics (featuring wildly inflated percentages) while doggedly restating their positions.”

CBS has waged a PR push on TV, in print, on radio and online at KeepCBS.com. CBS chief Les Moonves, in a memo to CBS employees last week that was distributed to the media, said Time Warner Cable’s payments to the Eye are “out of whack,” claiming the cable company pays CBS less than cable channels with lower viewership.

“It’s not like Time Warner Cable doesn’t have the money,” Moonves said in the memo. “Cable is a very, very profitable business, and Time Warner Cable can certainly afford to pay CBS a fair rate for our programming without passing any added cost on to its customers.”

Time Warner Cable has complained that CBS programming — like other broadcast TV — is available free online at CBS.com, as well as through streaming subscription services like Netflix and Amazon’s Prime Instant Video.

SEE ALSO: CBS Uses Radio Heft in Time Warner Cable Battle

CBS in the last five years has reached deals with all other major pay TV operators, including Comcast, Cablevision, DirecTV, Dish, Verizon FIOS and AT&T U-Verse, according to the broadcaster — and its local stations have never gone dark because of a retrans dispute over that time.

Separately, TW Cable remains locked in a fight with Milwaukee-based Journal Broadcast Group, also over retrans fees. That led to blackouts of Journal Broadcast’s CBS and NBC affiliates in four markets last Thursday. The operator says the station group is asking for a 200% rate hike, while Journal Broadcast says the increase is only pennies per day per viewer. The companies were continuing negotiations as of Monday.

CBS and other broadcasters are bent on boosting the revenue they earn through retransmission-consent deals. CBS execs are aiming to double the company’s retrans revenue this year to $500 million.

This year retrans payments in the U.S. will reach $3 billion, doubling to $6 billion by 2018, according to estimates by research firm SNL Kagan. Under federal law, TV stations are allowed to demand either payment from pay TV operators for their channels or opt for “must carry,” which ensures distribution but involves no compensation.

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  1. brent says:

    do people go online more or do people watch tv more I think it nice that they can put tv shows or movies online I think it stupid that time warner cable rejected the tv stations what next going to happen in the world buy I tell you it’s a scary world out there

  2. Jeff in Palm Springs says:

    I live in Palm Springs and we have lost our local NBC station since Wednesday night. TWC ended our feed at midnight, so I lost my channel in the middle of Jay Leno. I guess since we are out in the desert and are a local station, it doesn’t make much news, but when calling TWC and asking for a credit for the stations I’m not getting they said they don’t offer that.

    I’m sure TWC isn’t only at fault, I thought the stations make money on the advertising? What bothers me is not the network programing being lost, there are outlets to get that later, but our local news is important for a community.

    I don’t like bigger government, but there should be a right to carry local stations in local markets if the FCC is giving monopolies to the cable companies

  3. Kathleen Lytle says:

    We are all getting nickel & dimed & dollared to death by every big corporation! From TV to insurance to the food on our tables. It’s time to demand government regulations on every last one. We pay big money and then our taxes subsidize each and every one. Looks like some major double dipping into our pockets!

  4. Kristina says:

    i will miss the big bang theory and other shows on CBS, however i hate the fact that i have to pay $14.99 a month for Showtime when i don’t even watch it. I wanted HBO but was told that there were no packages offering HBO. i had to order that.

  5. SFSolstice says:

    I really enjoy a number of shows on the CBS network as well as my local news in San Francisco on the CBS O&O KPIX-TV 5. It’s times like this that I am really glad I don’t live in NYC and that I have Comcast Xfinity for my cable and internet services. TWC sounds like a weiner !

  6. Amanda says:

    Can’t think of any cbs shows I would miss…

  7. I.Silence says:

    TWC YOU SUCK AS BAD AS CBS. F U BOTH.

  8. I.Silence says:

    CBS SUCKS SO BAD IDC IF THEY GO OUT OF COMMISION. HOPEFULLY THOSE GREEDY PIECES OF GARBAGE DO.

  9. You have been offering 300.00 gift Cards to new customers and yet you pull the plug in the middle Of A paid premium station! Showtime-People like myself that have paid for cable for more than 25 years,(since it was United Cable) have paid for the gift cards you are giving away. You did not provide us with a choice or breakdown of an increase.Yet what you don’t realize Channel 2 and 9 are the only stations that provide helicopter coverage for local emergencies etc. we do rely on that . All I have to say is we did not have a choice and perhaps employees need to go apply at ATT Uverse! I will be forced to call them because you, Time Warner, did not give us a choice!

  10. cadavra says:

    I assume TWC will pro-rate whatever money I pay for Showtime for whatever period of time it’s inaccessible. No? Of course not. After all, I have no say in the matter.

    • Cate says:

      TWC is HORRID in NYC! Slow internet, stuttery television with DVR issues – the second FIOS is available on my block, we’re switching over. FIOS has issues too – but I’m sick of TWC overpriced nonsense. I’m paying $240/month for bad service!

      • Cate says:

        Our TWC internet was out evenings last week. I was on the phone with tech help in Mumbai every night and getting no answers. And just today – a notice stating my modem ‘rental’ price is increasing! I’m in BROOKLYN – not the middle of nowhere!

        Screw TWC – as soon as we can get another internet option (Fios or whatever) – we’re out. I’d rather illegally download the shows we watch regularly than depend on them.

      • JS says:

        OMG! I so agree! I had TW years ago in LA, they were awful!! I actually wrote a letter to their CEO and got a ton of fees waived, costs compensated, etc. They are like the evil utility!!! And now I HAVE TO HAVE THEM IN NY! And they’re the most expensive with the worst service ever!!! I asked Verizon to send engineers to my building to see about getting them in here!!!

        Can’t believe TW has such a monopoly! They are HORRIBLE!!!

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