Can Time Warner Cable Hold Up Without CBS?

John
9-25-2013

It used to be the case that cable operators did not pay a fee to rebroadcast the content of broadcast networks like CBS, ABC, and NBC because they could be viewed over the air freely. Sometime in the past few years, though, this free arrangement changed and now Time Warner and the other cable operators negotiate with the broadcast networks individually to determine a rebroadcasting fee. A few months ago the negotiations between Time Warner and CBS broke down and Time Warner has since decided that they are unwilling to pay the requested fee to CBS. This decision by Time Warner leaves any Time Warner customer in several major U.S. cities unable to view CBS through their cable subscriptions.

While this situation is not all that uncommon, this particular negotiation is worthy of a little more investigation. A new company named Aereo, with a little sneaky legal justification, has started rolling out a service that rebroadcasts the free network channels without paying them a fee. Aereo is fighting the networks in court right now but if Aereo wins, then cable operators will have a new leverage over the networks. Also of note is the decision by CBS to block any Time Warner subscriber from watching CBS shows on their website, which are free to anyone who doesn`t have internet access through Time Warner Cable. This discrimination of access through internet provider has only occurred one time previously, during a dispute between Hulu and Fox. Fortunately, customer outrage caused Fox to reverse its decision.

If this situation between Time Warner and CBS continues, there will likely be a net neutrality battle held in court to determine if this blocking by CBS is legal. Surprisingly, the other cable operators have not tried to steal customers from Time Warner by holding the lack of CBS over them, though some cable providers, like AT&T, have released a super att uverse coupon code perhaps with the intent that any frustrated Time Warner subscribers might be shopping around. The lack of active solicitation of Time Warner existing affected customers, though, indicates that the other cable operators are hoping that Time Warner is able to win its dispute with CBS through negotiation or legislation. This victory would be a net benefit to all of the cable operators.

The clock is ticking on any moves to be made by Time Warner, CBS is the number one broadcast network in the country and when the fall season begins, especially the coming NFL season largely contracted through CBS, customers will start to take more notice of CBS` absence.

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