updated 04:00 pm EDT, Mon August 5, 2013
Letter using incendiary remarks, may not be entirely above board
[Updated with a statement from CBS] With negotiations continuing, Time Warner Cable's CEO Glen Britt says that the cable giant is ready to continue broadcasting CBS programming -- with certain caveats. A letter from the Time Warner CEO to his counterpart at CBS proposes that "Time Warner Cable immediately agree to resume carriage with the new economics TWC resultantly agreed to during our negotiations, while employing all the other terms and conditions of our recently-expired contracts." Interestingly, the letter also suggests to CBS CEO Les Moonves that Time Warner Cable could allow the programming on an a la carte basis, with 100 percent of the price remitted to CBS, allowing the free market to dictate if the CBS programming is valuable.
In the potentially incendiary letter to CBS, the letter demands that in connection with either proposal, Time Warner expects CBS to "immediately resume carriage of your CBS stations" and requires that negotiations be "ongoing to make sure consumers are not once again held hostage by CBS during this process."
Furthermore, Britt takes umbrage to CBS's online block on Time Warner Cable Internet customers, preventing them from seeing CBS programming online. Britt calls the block "surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others." Britt notes that the channel uses free government-sanctioned airwaves to broadcast the content "and has public interest obligations that it is plainly flouting."
In a statement released this afternoon, CBS claims that "today's so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith. Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn't work that way and isn't likely to for quite some time. In short, this was an empty gesture from a company that is expert at them."
CBS claims to want "fair compensation for the most-watched television network with the most popular content in the world. We will not accept less. We will not sign away rights not granted to others. We will not give up our channel position or any other asset by which our viewers identify us." Shortly after Time Warner Cable pulled CBS content, CBS started blocking Time Warner Cable Internet service customers from its website. The block is affecting other smaller ISPs that Time Warner leases connectivity to as well, as a side-effect of the IP-level block.
According to sources, Time Warner Cable pays between 75 cents and $1 per subscriber for CBS programming. CBS is reported seeking as much as $2 per customer. CBS CEO Les Moonves said in a memo to customers earlier this month that "it's not like Time Warner Cable doesn't have the money. Cable is a very, very profitable business, and Time Warner Cable can certainly afford to pay CBS a fair rate for our programming without passing any added cost on to its customers."