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Fox Declines to Point Finger at Cablevision

6:20 p.m. ET

Fox says it has "carefully complied" with its statutory duty to
conduct its retransmission consent negotiations in good faith, but it made no
characterizations about Cablevision's negotiations.

That came in a letter Monday to the FCC
in response to a request from the Media Bureau for a description of the
negotiations by both sides in a retrans dispute that has seen Fox stations
in New York, New Jersey, and Philadelphia go dark on Cablevision systems Oct.

While Cablevision said Fox was not
bargaining in good faith, Fox did not make the same accusation. The FCC had
also asked for evidence of either side not negotiating in good faith.

Fox did not say it lacked that evidence,
only that it was not offering it up: "We respectfully decline to do so at
this time. We remain hopeful that negotiations will continue and ultimately
result in a retransmission consent agreement acceptable to both parties."

Broadcasters have argued that
the retrans system is working, so it would not have been in Fox's interest
to suggest it is not. Cablevision has, by contrast, called for FCC intervention
in the process.

While the FCC's letter had been addressed
to News Corp. President Chase Carey, the response came from Michael Hopkins,
president of affiliate sales and marketing for the Fox Networks Group, who said
he was most familiar with the negotiations.

Like Cablevision, Fox said it had been
able to reach deals with others, but was discouraged by its failure to do so in
this case.

Fox said it recognized its approach
to retrans had changed from seeking to launch cable nets to getting cash,
but that today it was imperative to tap a second revenue stream or it would not
be able to acquire the major sports events (the absence of which from
Cablevision lineups has been one of the key drivers of Washington's interest in
the issue).

Fox alleges in the letter that, in
meetings with Cablevision, its president, James Dolan, said that Fox is
"worth what we are asking, if not more," which Fox saw as a
"gentlemen's agreement" to pay the market rate Fox had established in
a deal with Time Warner Cable for carriage on New York systems. Instead, says
Fox, it got an offer for "vastly expanded rights" that Fox calls unprecedented
and would have.

Fox says it did not present its offers as take it or leave it, and
that at one point (on Oct. 20) News Corp. President Chase Carey rearranged his
schedule to fly cross country for a meeting about the impasse. At that meeting,
says Hopkins, Mr. Dolan made it clear that Cablevision's preferred path
was to continue to seek political or regulatory relief.

In an interesting twist, Fox says that on
Monday, Oct. 18, two days after the stations went dark on Cablevision, the
cable operator "suggested it might be willing to purchase WWOR-TV from

Fox told the FCC that it was willing to
negotiate "any time in any place," but said it did not think outside
binding arbitration would be an "effective path" to the resolution of
this or other retrans disputes. For one thing, said Fox, if it acceded, it
would open the door for every future negotiation to include arbitration demands
and would distort the process.

It went further, suggesting that appeals for help from Washington
have helped prevent a deal. "[T]he specter of a politically imposed
arbitration or heightened regulation has become an impediment to reaching a
business solution.

The FCC posted
a links to the letter, which outlines in some detail the series of negotiations
that led to the impasse: