Courtesy Dalas Morning News

(December 30, 2009) Time Warner Cable says its customers will be able to watch Saturday's Cotton Bowl game, Sunday's Cowboys game and Monday's Fiesta Bowl game with TCU on the local Fox TV station, even though it's still negotiating with Fox owner News Corp. over fees for other channels.

But Fox fired back Tuesday night, describing it as a ploy.

"This is another desperate attempt by Time Warner Cable to retain Fox's marquee programming without providing fair compensation," Fox said in a prepared statement.

Earlier Tuesday, the nation's second-largest cable provider, Time Warner Cable, told the local Fox station, KDFW, that "federal law requires cable companies to carry broadcast stations if the station does not elect a retransmission agreement," said Jon Herrera, a regional vice president with Time Warner Cable.

"We have a 'must-carry' arrangement for KDFW starting Jan. 1," Herrera said. "We're of the opinion that we have a deal with them."

Herrera and spokesman Gary Underwood would not detail the federal communications laws on which they're relying. They said other Fox-owned and operated stations, such as those in Los Angeles and New York, and cable channels would be excluded.

Program issues
Tuesday's developments ratchet up the already contentious negotiations between the media giants over Fox's demand to be paid for its network programs, such as football games and American Idol. Time Warner Cable's North Texas customers could lose local Fox stations and national network broadcasts – KDFW (Channel 4), FX, Fox Atlantic, Fox Reality, Fox Soccer, Fox Sports Southwest, Fox Sports en Español, Fuel and Speed – when the contract expires at midnight Thursday.

Time Warner Cable said it planned to send an e-mail blast to customers Tuesday night and run print and TV advertisements today about its intention to air the football games.

In its statement, Fox disputed Time Warner's interpretation of federal law.

"Time Warner Cable is prohibited [under the U.S. Copyright Act and the Communications Act] to carry KDFW and KDFI after our current retransmission consent agreement expires at midnight on Dec. 31, unless a new agreement is reached," Fox said.

Todd Stansbury, a communications lawyer for Wiley Reinin Washington, D.C., explained that networks must decide every three years whether to grant cable operators the rights to air its programs and must provide written notice by a certain date before the contract expires. If the broadcaster does not do either, the contract defaults to "must-carry" status, meaning the cable operator is required to air the network.

Two other broadcast lawyers who declined to be identified said the contract between Time Warner Cable and Fox could be more complex or contain restrictive terms.

As Thursday's deadline looms, the stakes increase for both sides. The Dallas area ranks as the nation's fifth-largest TV market, with 2.5 million viewers. This year, Fox carried the nation's top two regularly scheduled TV programs (American Idol on two nights) and three (all football games) of the top 10 one-time programs, according to the Nielsen Co.

Time Warner Cable and Fox continue to negotiate, meeting face-to-face in Los Angeles Tuesday.

Stand to gain
Other media players stand to gain customers from the dispute.

Cable rival Dish Network is actively courting them.

On Monday, it began running advertisements in Dallas and dozens of other Time Warner Cable markets for a special deal: $24.99 a month for more than 120 TV channels, free HBO and Showtime for three months and free installation.

Francie Bauer, a Dish spokeswoman in Englewood, Colo., said the company wants Time Warner customers in the Dallas area to know "there's a better option out there that ensures they won't lose their favorite channels."

Already seeing a difference is Bruce Hackfeld, president of DishBeatsCable.com, a Plano-based independent retailer for Dish. His business has more than doubled since Christmas and it's not just because of the typical holiday boost, he said.

"The Time Warner thing couldn't have come at a better time for us, with Christmas and everybody getting their new flat screen TVs," Hackfeld said. "We've got a ton of people concerned about watching the Cowboys game this Sunday. A lot of people are already fed up with cable and ready to make the switch."

'Negotiating ploy'
One of them could be Time Warner Cable customer Mike Sakas of Euless.

"My personal feeling is that the whole thing is a bunch of noise – a negotiating ploy," Sakas said. If Time Warner Cable doesn't run Sunday's Cowboys game, "you can always run down to the sports bar. But if they cut it, I'll probably switch [to another cable provider]."

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