TWC Sued Over CBS Blackout; FCC Avoiding Involvement in Carriage Dispute21 Aug, 2013 By: Doug McPherson
LOS ANGELES – Subscribers ticked about paying for channels they don't receive filed a class action lawsuit last week against Time Warner Cable (TWC), which is in a fee dispute with CBS.
Three Southern California residents are the lead plaintiffs and say they were cajoled into subscribing to TWC service by the promise of CBS-owned channels Showtime, Movie Channel and Los Angeles station KCAL – but couldn’t watch them because of a blackout that has now stretched longer than two weeks.
CBS and TWC have been fighting over CBS's request to increase carriage fees for its channels. CBS has pulled its channels in several major markets, including Los Angeles.
The plaintiffs say if they’d known there might be a programming blackout, they wouldn’t have subscribed to TWC. And one plaintiff said he wouldn’t have bought TWC’s Internet services either if the cable TV service was not offered “to his satisfaction.”
The suit alleges that two of the plaintiffs complained to TWC that they couldn’t watch programs and events such as “Big Brother,” the PGA Championship, “Dexter” and “Ray Donovan” because of the blackout. They said TWC ads in October 2012 promised them six free months of Showtime for signing up to TWC basic cable services.
The suit says the courtesy replacement programming “is not a reasonable substitute for programing blacked out, as it does not include a fungible offering of programs relative to CBS and Showtime.”
The plaintiffs want an unspecified reimbursement for subscription fees paid. TWC hasn’t commented on the suit.
Wells Fargo Securities’ analyst Marci Ryvicker wrote in a report last week that the Federal Communications Commission (FCC) can only get involved if either side files a complaint charging the other with not negotiating in “good faith.”
That hasn’t happened, but TWC has written to the FCC suggesting it take action to prevent owners of the big four networks from tying carriage of their local stations to arrangements covering cable assets.
"There is not much the FCC can do other than urge a resolution,” Ryvicker wrote. “The FCC would prefer that retrans remain a market-based regime rather than enforce a heavy hand.”
Ryvicker added that Congress might examine retrans, but likely only in relation to the TV ecosystem at large, including “bundling of cable networks.”
The endgame in the dispute could mean an overhaul of telecommunications legislation passed in the early 1990s, MediaPost reports.