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Fox explains its role in Time Warner Cable fight with Sinclair Broadcast Group

December 8, 2010 | 12:07 pm

A battle between Time Warner Cable and a big owner of local television stations is getting more complicated.

At the end of the year, Time Warner Cable's deal to carry TV stations owned by Sinclair Broadcast Group expires. Sinclair owns 57 stations around the country including 20 Fox affiliates, many of which operate in markets where Time Warner Cable has systems. Like the big broadcast networks, it wants Time Warner Cable to pay to carry its local stations in cities such as Buffalo, N.Y.; Dayton, Ohio; and San Antonio.

The two are haggling over price, which is normal in these situations. But now there is an added complication. Earlier this year, Time Warner Cable signed a deal with Fox and as part of that deal, the network agreed to provide the cable operator its programming should one of its affiliates -- stations that carry the network's programming but are independently owned -- pull their signal.

That move has not won Fox any friends at Sinclair. In an interview earlier this week, Barry Faber, the general counsel of Sinclair, said Fox's insurance deal with Time Warner Cable "makes it more difficult to negotiate for retransmission consent if your network has provided the cable company an alternative way to receive the feed." Asked what Fox said to that assertion, Faber said, "They have a different take."

Initially, Fox declined to comment on its deal with Time Warner Cable or on whether it was undercutting its own affiliates. On Thursday Fox spokesman Scott Grogin said that while the company does not want to get in between Sinclair and Time Warner Cable, it is accurate to say its deal with Time Warner Cable allows Fox to provide the network's programming to the operator.

Specifically, Fox can provide its own entertainment and sports programming, but not the local and syndicated programming on the station without Sinclair's blessing, and that seems unlikely. Time Warner Cable would pay Fox for that. Neither Fox nor Sinclair would say if any money Fox paid for the network's feed would be shared with the affiliate.

"Our goal is to protect Fox viewers from any service interruptions, allow our affiliate partners to reap their local ad dollars and continue to negotiate a retransmission agreement without deadline pressure," Grogin said. "We also believe that‪ the deal provides significant incentive to both sides to come to an agreement that protects consumers."

Interestingly, earlier this fall Fox pulled its signals from Cablevision Systems Corp. in New York when it couldn't get the deal it wanted. A few weeks later, the two reached an agreement and the signal was returned. Now the network is seen by some of its affiliates as being more interested in protecting a cable operator than in seeing their partners have the same negotiating leverage it enjoyed with Cablevision.

While Sinclair and Time Warner Cable continue to fight, William Lake, the Federal Communications Commission media bureau chief, said Wednesday that the agency would propose new rules for so-called retransmission consent negotiations that "advance the statutory objectives of allowing retrans fees to be set by market forces while protecting the interests of consumers." After all, Lake quipped, "when the elephants fight, it is the grass that suffers."

-- Joe Flint

Related post: Fox clause becomes focal point of spat between Time Warner Cable and Sinclair Broadcast Group.