Time Warner Cable launched a public relations blitz Wednesday, asking customers whether they would be willing to pay higher rates to get certain channels.
In newspaper and TV ads, the cable giant is asking subscribers whether it should "roll over or get tough" with local stations and cable networks seeking higher fees for their programming and asks customers to cast a vote at www.rolloverorgettough.com.
This issue has become increasingly contentious in the recession as stations seek to make up revenues lost to declining advertising by asking cable and satellite providers to pay more for their programs.
Companies such as Time Warner Cable have balked at the demands, arguing that the costs would have to be passed on to customers.
"Because of the weak ad market, some programmers are demanding up to 300 percent more," said Melissa Buscher, spokeswoman for Time Warner Cable's Carolina region. "We're asking customers if they're willing to pay more or do you want us to get tough with programmers and networks."
Local stations' case
"Local broadcast stations are still the most significantly viewed channels on the local cable systems," said Tim Morrissey, general manager of Charlotte's WCNC (Channel 36) and vice president for television of the Raleigh-based N.C. Association of Broadcasters.
"ESPN can get $4 a month per subscriber, and broadcasters get pennies."
In 1992, Congress said cable companies could no longer carry local broadcast stations without their agreement, called retransmission consent. This allowed local broadcasters to negotiate a fee for carrying their programming.
It recognized that cable firms derive value from showing local stations, which - with their network affiliations and local news content - are their most-viewed channels.
Stations typically negotiate a monthly fee of 20 to 25 cents per cable subscriber per month to carry their content. In contrast, ESPN typically commands more than $3 per household per month from cable and satellite providers.
Value of local stations
Local stations argue that their cable ratings dwarf those of any cable network and that they should be worth more. When satellite TV services began offering local stations a few years back, satellite subscriptions rose immediately and are still rising. Cable companies, concerned about pricing, argue that they must hold the line on paying retransmission fees, saying increases would be passed on to customers.
In addition, cable providers say, local TV is available free over the air and doesn't equate to specialty channels such as ESPN, which has expensive programming contracts.
When broadcasters and cable companies fail to reach agreement on fees, the channels can be blacked out. Time Warner Cable serves about 810,000 subscribers in the Raleigh-Fayetteville-Wilmington region.
