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Outraged By the Cable Wars? Cut the Cord


The ugly spats at Time Warner and Cablevision will drive customers away.

By now, the only people who don't know about the now-settled battle royale between Fox (NWS) and Time Warner (TWC) over re-transmission fees are the ones who still gather around the radio in the family room each evening and listen to the news while Mom prepares supper.

The terms agreed to by the two sides weren't revealed, but according to reports, Fox was seeking $1/month per subscriber from Time Warner, up from the $0.35 it was receiving at the time. By comparison, ESPN gets about $4 per account and TNT gets $1.

Reasonable? Greedy? A little bit of both?

Fox launched an advertising campaign explaining to consumers that they were asking for increased fees for the programming it delivers -- The Simpsons, NFL football, and 24, among others.

Time Warner then retaliated with its own series of ads appealing to the wallet of the common man; that the behemoth Time Warner, known for some of the worst customer service in the entire United States, was taking the side of the poor, oppressed cable subscriber who would be forced to pay increased rates for service if they "gave in" to Fox's "demands."

But these were negotiations that Time Warner co-opted in a pathetic attempt to reposition its widely reviled brand as a benevolent friend crouched down next to you, the viewer, in the same foxhole, trying to fight off the greedy, faceless Fox.

With millions upon millions of subscribers paying more than $100 per month, couldn't Time Warner have absorbed the additional cost to keep carrying Fox -- or at least taken on a portion of it? Are we actually supposed to believe the company is that strapped for cash that a $0.65 increase in a portion of its subscriber operating costs would bring it to its knees?

Now that Fox and Time Warner have come to a satisfactory agreement, we can focus on another, identical story being played out through another barrage of vicious, mudslinging ads.

Cablevision (CVC), another widely-reviled company, is casting itself in the same mold as Time Warner in the Fox fight. But this time, Cablevision is trying to pass itself off as your benevolent friend crouched down next to you, the viewer, in the same foxhole, trying to fight off the greedy, faceless Scripps Network (SSP), which is asking for increased fees in exchange for the Scripps-owned HGTV and Food Network.

Cablevision used the occasion to try to curry favor with those who sit at home waiting for the cable guy to arrive "sometime between noon and 5 p.m.":

"With virtually no warning, Scripps took the extraordinary step of flipping a switch and removing its channels from Cablevision -- effectively holding their own viewers hostage in order to pursue a more than 200% fee increase from Cablevision and our customers," the cable company stated.

200%!!!! Whoa! That's one hell of an increase!

Actually, in actual money per subscriber, it's not outrageous at all. Scripps currently receives a whopping $0.25 per subscriber from Cablevision for HGTV and Food Network and would like $1.

Scripps countered that its per-subscriber rate "is considerably less than rates Cablevision pays itself for less popular networks that it owns."

Sounds like Time Warner and Cablevision are simply concerned that once they agree to pay more for one channel, the floodgates will open and everyone else will appear on their doorstep at negotiation time, hat in hand.

Who gets shafted in the end? Not Time Warner or Cablevision. Not Fox or Scripps. Consumers do.
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