News Corp. and Cablevision settle retransmission dispute, but it’s not a happy deal

At least Fox’s television signals are back on the air for 3 million Cablevision customers in the New York, Connecticut and New Jersey. However, the tentative deal between the parties remains bitter, and Cablevision’s customers are almost certain to see an increase in their cable bill.

At issue were fees Fox wanted Cablevision to pay to carry its stations, as well as the feeds for three cable channels — Fox Business Network, Spanish sports channel Fox Desportes and National Geographic Wild.

In a statement, Cablevision blasted the FCC for refusing to get involved in the dispute and criticized Fox over the terms of the deal.

“In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest,” Cablevision said, adding that the company conceded to Fox because “it does not think its customers should any longer be denied the Fox programs they wish to see.”

The signals were restored just before the start of Game 3 of the World Series, which was carried by Fox. Terms were not disclosed, but it was no secret that Fox was seeking a long-term arrangement that would require Cablevision to pay about 50 cents a subscriber for its Fox TV stations in year one that would gradually increase to $1 per subscriber, per month.

Cablevison said, “Our customers will pay more than they should for Fox programming.”

Fox’s response: “These comments should not surprise anyone, and they further confirm that this entire dispute was solely about Cablevision’s misguided efforts to effect regulatory change to their benefit.”

With the broadcast industry struggling amidst increased competition and soaring programming costs, Fox and other networks have been playing hardball to get cable operators to pay cash to carry their local TV stations. Most have been successful in that effort.

However, the nastiness of some of these retransmission disputes has angered not only cable subscribers but also members of Congress. U.S. Sen. John Kerry, D-MA, has proposed legislation to give the FCC more clout in these disputes and to ensure that signals don’t get pulled from subscribers until it is clear that both sides have exhausted every avenue to reaching an agreement.

Craig Moffett, a Wall Street analyst with firm Sanford Bernstein, predicted that Cablevision lost about .3 percent of its 3.07 million cable TV subscribers (less than 8000) due to the Fox retransmission dispute. Most disgruntled customers moved to Verizon's FiOS service.