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News Corp. Rejects Kerry’s Call to End Retrans Dispute with TW

News Corp. has turned down a request from Sen. John Kerry (D-Mass.) to take immediate steps to resolve a retransmission dispute between Time Warner Cable and Fox broadcast and cable channels before the current contract runs out at end of the year.

At issue is a battle between Fox and Time Warner to keep Fox owned-and-operated broadcast stations and cable networks on the nation’s second largest cable service. The current contract ends midnight, Dec. 31. The two companies are also negotiating carriage of several of Fox’s regional sports networks as well as some of Fox’s national cable channels in more than two dozen markets. Fox is seeking one dollar per subscriber and the outcome of the negotiations could influence all future retrans negotiations between cable and broadcasters. According to TV Technology sister publication Broadcasting & Cable, News Corp. President Chase Carey informed company employees on Dec. 30 that he doesn’t expect an agreement before Dec. 31 and that “our channels may very well go off the air in Time Warner Cable systems at midnight tomorrow, Dec. 31.” It would affect viewers in New York, Los Angeles, Tampa, Orlando, Dallas and Austin.

A week ago, Sen. Kerry, chairman of the Commerce Committee on Communications, Technology and the Internet, entered the dispute, calling for the two parties to settle their differences before the Dec. 31 deadline to ensure that TWC viewers would still be able to watch College Bowl games on Jan. 1 on their cable service. In a letter to Carey, Sen. Kerry said that while he hoped that the two companies would reach an agreement before the current contract expired, he suggested that Fox allow TWC to continue to transmit programming through the College Bowl season “either under current terms and conditions or under terms and conditions that will be retroactively applied once an agreement is reached, or under some third option. I also suggest that both parties strongly consider entering arbitration rather than having consumers lose access to programming.”

In response, Carey told Sen. Kerry yesterday that “we respectfully believe these discussions do not belong in the hands of a third party.” Carey said that while “you have my assurance that we will continue to work through the next day in the hope of reaching a deal prior to the expiration of our current contract,” he reminded the Senator that the current impasse needs to take current realities into account. “We strongly believe that this is an issue that needs to be settled at the bargaining table and that binding arbitration all too often looks to the past, not the future. This past has helped get the business where it is today, with an extremely powerful and profitable cable industry and a broadcast industry that is struggling to stay afloat.”

Carey said that News Corp. is “simply seeking fair compensation for content that has helped fuel the ever-increasing profit margins for the cable industry. Our goal is to maintain a healthy and vibrant broadcast industry for all Americans.”

Sen. Kerry responded that if News Corp. carries through on its threat to remove the stations and cable networks, then “I would ask the FCC to intervene and mandate continued carriage and arbitration as Senators Inouye and Stevens urged the FCC to do in a similar dispute in 2007.”