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Cablevision Responds to Fox's Defense of Negotiations

In what has become something of a regulatory game
of "tag, you're it," Cablevision Tuesday responded to Fox's
response to Cablevision's allegations the broadcaster was negotiating in bad

In a letter to Media Bureau Chief Bill Lake,
Cablevision COO Tom Rutledge said that Fox's response, in which it
illustrated why it thought the negotiations were in good faith, said that
instead, Fox's defense had made two points clear: "News Corp. has negotiated
in utter bad faith and the matter is at an impasse."

The latter of those certainly seemed true in
whichever latest letter or explanation to FCC staffers or commissioners was at

Cablevision focused on the most favored nation
clause in a News Corp. agreement with Time Warner Cable that it said News Corp.
did not want to trigger by agreeing to pay Cablevision's price, which it said
was the market rate. That clause means that if Cablevision pays News Corp. less
that Time Warner Cable, TWC would then get to pay that lower rate as well.

Cablevision argues that TWC's price was based
on an agreement covering a "variety" of cable nets and broadcast
stations, i.e. a package deal that "cannot possibly" be the
market rate for Fox's WNYW in New York.

Cablevision reiterated its call for FCC
intervention, calling it "critical."

A senior FCC official, speaking on background,
appeared Tuesday night to be losing patience with the ongoing appeals from
Cablevision, saying: "It's encouraging that Cablevision has a new
'constructive offer' and is prepared to negotiate in 'good faith.' But they
should spend less time writing publicity-seeking letters to the FCC, and more
time at the negotiating table reaching an agreement." Cablevision CEO
James Dolan also wrote FCC Chairman Julius Genachwoski Tuesday to ask him
to step in personally and broker a meeting with News Corp. President Chase

All the letter-writing came as the Wednesday start
of the World Series (on Fox) drew near, with Cablevision viewers in New York,
New Jersey and Philadelphia facing the prospect of switching carriers, hooking
up the old rabbit ears or heading to a local sports club to catch the first
game, though there may be slightly less urgency since their respective home
teams were knocked out in the two league championship series.

The current impasse affects about 3 million subs, but many more could
be affected if Fox and DISH do not strike a retrans deal by their Nov. 1

"Cablevision has and will continue to negotiate in
good faith," said Cablevision EVP Charles Schueler. "We are trying to
reach a deal that is fair for everyone, including our customers, but there has
been absolutely no movement by Fox in their attempts to gain massive fee
increases from Cablevision customers to carry broadcast signals that are free
over the air."

"The FCC is the government agency charged with protecting
television consumers and oversight of broadcast licenses. We do not
understand how protecting and interceding on behalf of TV viewers in 3 million
blacked out households in the Northeastern United States does not fall under
the FCC's purview. The FCC has the facts and our customers are demanding
that the FCC act."