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New York Hears From Both Sides In TWC/CBS Dispute

The New York City Council held an oversight hearing Aug. 8 on the current retrans fight there.

The Comittee on Consumer Affairs and Subcommittee on Zoning and Franchises teamed up for the hearing, which framed the issue succinctly: "Time Warner Cable, CBS and the Consumers Stuck in the Middle."

According to the testimony of Marcellus Alexander, executive VP of television for NAB, said no changes in law or regulation are needed and that while he understood the council's concern with how "contractual impasses affect their constituents," he pointed out that the CBS stations are still available over the air (they are also available via Aereo, but the NAB isn't going there). That said, Alexander conceded broadcasters could probably do a better job of letting viewers know about the over-the-air option, and cable operators do better at letting their customers know there could be disruptions.

He said the FCC should allow customers to switch easily among competing pay TV providers, without penalties and with rebates for stations that go dark.

Marty Franks, who has been involved in all of CBS retrans negotiations for more than a dozen years, also testified. He said the company understood that viewers "are innocent victims in the corporate crossfire," but that finding a solution "takes two."

He said that while viewers could "resort" to an antenna if necessary, it was clearly not a remedy for all. The remedy he suggested would be to resolve the dispute, which he says CBS has been trying to do.

Franks told his audience that if they took away only one thing from his testimony, it was the following: "Since 2006, when CBS became a standalone company, we have negotiated over 100 retransmission consent agreements without even a hint of public discord, much less having our channels dropped"…until now, a negotiation he concedes has gone "badly off course."

Franks said CBS has continued to negotiate in good faith, which is the standard for avoiding getting the commission involved. He also suggested the two sides have made progress last week on "some points," - he did not say which - before "Time Warner chose instead to cut off both the negotiations and our channels to their subscribers because, as they explicitly told us, it would give them more leverage."

According to his testimony, Rory Whelan, regional VP for Time Warner Cable, his company is eager to resolve the dispute and has offered "common-sense" proposals that have been rejected. Whelan said CBS is engaging in "punitive conduct by blocking TWC's Internet access subs nationwide from viewing CBS programming online."

Whelan said such blocking was akin to "yanking television antennas off our customers' rooftops to make certain they cannot access CBS programming over the air…CBS anticompetitive tactics must stop immediately."

Whelan said the retransmission consent regime is broken and in need of reform, and asked the council to join its voice to others calling for FCC reform.