Time Warner Cable, Sinclair Extend Retrans Agreement by One Day but Brace for Blackout
Although Time Warner Cable and Sinclair extended their retransmission consent agreement by a day, the pact was still set to expire Saturday and the companies were bracing for a signal blackout. Sinclair wanted a longer extension, General Counsel Barry Faber said in an e-mail to reporters. “Time Warner has instead simply drawn an arbitrary line in the sand insisting that it will drop the stations if the agreement is not completed by midnight on Saturday,” he said. “Sinclair does not believe there is any realistic chance that this deadline … will be able to be met.” A Time Warner Cable spokeswoman said negotiations continue and the cable operator is working hard to reach an agreement. “We are still hoping to avoid a broadcaster blackout, but even if Sinclair pulls the plug on Saturday night, Time Warner Cable will continue to provide all available Big 4 network programming to its subscribers,” she said.
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As in a recent dispute with Smith Media, TWC has made arrangements to import distant stations’ signals to markets where it loses access to Sinclair’s signals, the spokeswoman said, declining to say which stations’ signals TWC may import. Broadcasters that found their signals imported during the Smith dispute protested to the FCC, but TWC said in response to a complaint filed by United Communications Corp. that it hadn’t violated any FCC rules. By importing UCC’s distant signal, “TWC succeeded in preventing the consumer harm associated with the loss of popular network programming while the retransmission consent impasse with Smith was ongoing,” the cable operator said.
TV stations can protect themselves from distributors importing distant signals by invoking network nonduplication rights, but not all broadcasters have been diligent in perfecting those rights in recent years, said a cable attorney following the disputes. “Nothing is automatic -- neither having the right nor exercising it,” the lawyer said. That has given cable operators such as TWC a window to bring in distant signals during disputes to avoid the loss of viewers that usually results from losing access to a local affiliate, the lawyer said. “A series of things have come together to make this a more viable option, although because of the network nonduplication rules one that may have a geographic or temporally limited life.” The cost of transporting distant signals has come down, and broadcasters are seeking higher retransmission consent fees, changing the economics of the decision, the lawyer said. “As the demands of the broadcasters got more out of line with the cost of importing a distant signal, then operators had to look at the alternative."
Sinclair has begun to invoke its network nonduplication rights, which will require TWC to begin blacking out network programming from the imported stations toward month’s end, a TWC spokesman said. The company will be able to make arrangements to keep carrying Fox’s national programming, she said. But Sinclair’s Faber said he doesn’t believe TWC will have the right to continue carrying the Fox programming. “We believe Time Warner’s right to receive a Fox network feed … only exists if a station has refused to grant Time Warner consent to retransmit the signal,” he said. And since TWC has declined the latest extension offer, Sinclair believes it won’t have that right, he said.
Meanwhile, Sinclair and Bright House have reached a new retransmission consent agreement and extended its current deal by a week to complete the new one, Faber said.