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CBS Calls TWC's New Offer A ‘Sham’

Programmer Dismisses Britt's A La Carte Proposal; Digital Rights Remain a Sticking Point in Dispute 8/05/2013 10:45 AM Eastern

(Updated: 7:40 p.m. ET)

CBS dismissed Time Warner Cable’s offer to get CBS’s stations back on its cable systems as a  “sham.”
 
“Today’s so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith," said CBS in a statement. "Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn’t work that way and isn’t likely to for quite some time. In short, this was an empty gesture from a company that is expert at them."

The statement came in response to a letter Time Warner Cable CEO Glenn Britt sent to CBS CEO Les Moonves offering some proposals for returning the stations to its subscribers. Time Warner Cable pulled 13 stations in eight of its service markets, as well as premium network Showtime across its national footprint on Aug. 2. The MSO said there hadn't been any negotiations over the weekend.

One of Britt’s offers was to resume carriage with what he called “new economics” TW Cable agreed to during negotiations, while leaving other terms in place.
 
Another was making CBS stations available to subscribers on an a la carte basis, with 100% of the price being remitted to CBS.
 
Of the first option, Britt said “although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers.”
 
Britt said the a la carte idea would mean that “rather than debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.”
 
Responding to CBS’ rejection, Time Warner Cable said: “Our efforts to get CBS programming back for our customers are sincere, and we have offered two proposals to accomplish that, while CBS has offered nothing in return. In addition to our a la carte proposal, we've offered an increase and the exact same contractual terms both companies have successfully operated under for nearly five years. We cannot understand why that is not enough for CBS. We're disappointed in their lack of responsiveness, particularly to our request for them to quit unfairly blocking the free content available on CBS.com from our Internet customers. We hope they will return to the table to negotiate in good faith on behalf of our customers and their viewers.”

The following is the body of Britt's letter, addressed to Moonves:

    "In the interests of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts. Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers.

    Alternatively, if you are unwilling to agree to this proposal, we would also be willing to resume carriage by allowing CBS to make its stations available on an a la carte basis at a price and on terms of its choosing, with 100% of that price remitted to CBS. This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.

    In connection with both of these proposals, we would expect you to allow us to immediately resume carriage of your CBS stations (and other CBS-programming services) on retroactive terms as we work out any necessary details. The extension would be ongoing to make sure consumers are not once again held hostage by CBS during this process. We expect, though, that since each of our proposals is very straight forward, the papers can be completed quickly.

    Finally, we call on CBS regardless of whether it accepts or rejects our proposals, to immediately cease its blocking of CBS.com content from TWC’s high-speed Internet customers. Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others. This is especially so given that CBS uses free public airwaves to broadcast that content and has public interest obligations that it is plainly flouting. In addition, this conduct is abhorrent in that CBS is using this blocking to punish TWC’s Internet customers across the country, including millions of consumers in cities where we continue to carry CBS on our cable systems through agreements with other CBS-affiliated stations; is blocking customers of other multichannel providers, including Direct TV, with whom CBS has no dispute; and is apparently blocking customers of certain other ISP’s, to which TWC provides wholesale Internet services.

    We stand ready to speak with you immediately to follow up on these matters."

 

 

September