In case you forgot, Time Warner Cable and Sinclair Broadcasting only agreed to extend talks for two weeks on reaching a long term retransmission consent agreement that will keep 33 Sinclair-owned stations on the cable lineup.

On Thursday night, the latest deadline will expire, and Time Warner Cable is signaling negotiations are continuing, but do not look too promising.

In a prepared statement, Time Warner says Sinclair has summarily rejected every offer and has repeatedly claimed to “terminate” negotiations over the past three months.

The cable company has spent part of the last two weeks arranging for alternative program feeds from all four major networks should negotiations end without a final agreement.  That could be an important distinction for customers, most of whom watch Sinclair stations primarily for network programming.

“We will provide all available Big 4 network programming in the event that Sinclair takes away its signals,” said Rob Marcus, President and COO of Time Warner Cable. “We want our customers to remember that we’re fighting hard to contain the rising costs of broadcast programming. We are also still working to reach a long-term agreement with Sinclair before our current contract ends tomorrow night, and in fact discussions between the Time Warner Cable programming team and Sinclair have taken place as recently as this morning and are ongoing.”

But the two are still trading barbs.  As recently as today, the two were debating about how many customers would be impacted by a loss of the Sinclair signals.

The cable company said Sinclair was “inaccurately portraying” the number of impacted customers.

“Time Warner Cable has approximately 4 million customers who receive local broadcast stations owned by Sinclair Broadcasting,” a cable company statement said.

When the ball overlooking Times Square drops at midnight tonight, Time Warner Cable subscribers won’t have to say goodbye to local stations owned by Sinclair Broadcasting.  The two companies reached an agreement Friday to extend negotiations over programming fees paid by the cable operator until Jan. 14.

While the talks progress, Sinclair-owned stations will continue to be seen on Time Warner with no interruption.

The two companies have been locked in a dispute over programming fees that Sinclair characterizes as a dime’s worth of difference.

Sinclair owns stations in these communities.

Barry Faber, general counsel for Sinclair, said the two are arguing over Sinclair’s request to charge ten cents per month more per subscriber for their stations.

“We intend to continue our good-faith negotiations during this period with the intent of finalizing a longer-term agreement at pricing that reflects the higher cost of programming we are faced with today,” said Barry Faber, executive vice president and general counsel of Sinclair, in a statement released Friday.

The notion Sinclair faces “higher programming costs” is one some industry experts seriously question, considering Sinclair does not have a reputation for being a big spender.

Instead, many believe Sinclair is attempting to earn additional revenue they lost in the advertising downturn, attributable to the Great Recession.

The two companies hope to hammer out a final agreement after the New Year holiday, potentially ending the latest retransmission consent dispute threatening to throw channels and networks off the cable dial.

It's a three hour drive down Interstate 81 from Utica to Wilkes-Barre.

WKTV-TV Utica is off Time Warner Cable's lineup in parts of central New York this morning.

Viewers across Oneida, Herkimer, and other adjacent central New York counties lost their local NBC station early this morning after another retransmission consent dispute led Time Warner Cable to drop WKTV-TV in Utica, N.Y., from the lineup.

The fact Time Warner dropped a station is hardly unprecedented, but the cable company managed to replace the station almost immediately.  Away went WKTV, in came Nexstar-owned WBRE-TV, an NBC station serving Wilkes-Barre/Scranton, Penn.

This morning, Mohawk Valley viewers woke up to watching local news and weather for the Susquehanna Valley — 187 miles away to the south.

While Time Warner’s apparent agreement with WBRE keeps NBC shows rolling, the loss of local news and weather represents a major blow for area subscribers, many enduring a western and central New York winter that has brought more than 50 inches of snow in just the last two weeks in some areas.

Utica city officials expressed concern about the loss of the local Utica station because important snow emergency alerts were often delivered over the station.

“They might as well have imported a station from Florida, because there is very little in common between Herkimer County, New York and Luzerne County, Pennsylvania,” writes Steve, who lives in Herkimer.  “You would have thought they would have just grabbed an NBC station from Syracuse.”

...replaced with WBRE-TV, a station in Wilkes-Barre, Penn.

Apparently, Time Warner has permission from Nexstar to import the distant signal of the Pennsylvania station for impacted subscribers.  The effective reinstatement of network programming may make it more difficult for WKTV’s owner, Smith Media, to negotiate the station’s return to Time Warner’s lineup anytime soon.  That one NBC affiliate may have granted permission to replace another station during a contract dispute may become a point of contention on the network level.  Traditionally, broadcasters have not been quick to undercut other stations with such carriage agreements.

Smith’s other stations were also affected.  Time Warner dropped WFFF (Fox) AND WVNY (ABC), which serve the Burlington, Vt. market and the CW-affiliated digital sub-channel running alongside WKTV in Utica.  The station owner launched a website to share their position and educate people about how to receive the signals either over-the-air or via satellite.

In nearby Rochester, Time Warner continues to play hardball with Sinclair Broadcasting over a carriage agreement renewal for WUHF-TV.  But Time Warner customers facing the loss of the Fox affiliate will not see any interruption of Fox network programming — the cable company has a separate agreement with the network.  Ironically, Sinclair jointly operates WUHF with Nexstar Broadcasting of Rochester LLC, the owner of WROC-TV, the city’s CBS affiliate.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WKTV Carriage Dispute 12-16-10.flv[/flv]

Time Warner’s replacement of WKTV-TV in Utica with a distant station may be a new tactic in the hardball war over cable-broadcaster carriage agreements.  WKTV ran several stories about how the station’s loss impacts the area.  YNN’s Central NY news station, run by Time Warner Cable, also ran its own story this morning, all of which are covered here.  (9 minutes)

Glenn Britt, Time Warner Cable’s CEO, says the cable company’s biggest challenge in 2011 is remaining “completely focused on the customer.”

Britt told Michael Grebb, writing for CableFAX, that America’s second largest cable company cannot succeed if it dictates terms to customers.

“We have to deliver a differentiated customer experience that’s linked to our brand—a brand that says ‘we give you more control in ways that are simple and easy for you, the customer,'” Britt said. “We’ve heard loud and clear from customers that they want flexibility in packaging, including the ability to buy smaller packages. We’re working hard to deliver what they’re asking for.”

Britt is referring to Time Warner’s new pared-down cable-TV tier, TV Essentials.  Currently undergoing a market trial in northeast Ohio and New York City, it deletes more expensive basic cable networks from the cable package to provide a discounted, smaller lineup to customers.

Britt’s remarks come more than a year after the cable company experimented with an Internet Overcharging scheme that would have restricted consumers’ use of Road Runner unless they were willing to pay triple the price — $150 a month — for unlimited use.  The company shelved the test after an outpouring of customer complaints and threatened congressional action.

Britt’s remarks would seem to indicate Time Warner is not going to antagonize its customers in the coming year, especially considering the economic challenges many face.  Time Warner lost more than 100,000 subscribers in the last quarter alone.

“Even if we weren’t in a bad economy, we’d still want to deliver customized products and experiences to specific customer segments, which is smart business in any environment,” Britt said. “And it just so happens our lower [revenue] customer segments are most affected by the economy and are the same customers who are really shouting about smaller packages. With respect to ‘higher-end fare,’ I would add that, even with the tough economy, we’re still seeing good demand from higher [revenue] customer segments.”

Britt added Time Warner plans to be more aggressive about its own TV Everywhere project in the coming year.  TV Everywhere delivers on-demand programming online for “authenticated” customers who also subscribe to a corresponding cable-TV package.  No cable-TV package means no access to that programming online.

“Our firm belief is that consumers want access to any content, anywhere, any time and from any device,” Britt said.

Britt signaled the cable company feels on-demand is only part of the online video equation.  Portability — the ability to access content on-the-go, is also a very high priority for Time Warner.  Britt encouraged cable programmers to get on board and participate in the TV Everywhere project to help grow awareness of the service for existing cable-TV subscribers.

Britt also telegraphed the company was moderating its tone over retransmission consent agreement battles with cable networks and broadcasters.  While previous statements from the cable operator indicated the company was prepared to “get tough” with programmers seeking dramatic price increases, Britt’s latest comments suggest the company recognized consumers do not want to be put in the middle of the disputes and the company was taking the matter to Washington lawmakers to adjudicate instead.

Time Warner faces a major showdown with Sinclair Broadcasting, owner of several network affiliate stations, which will come to a head on New Year’s Eve.

“We will continue to work hard to reach fair agreements, but we believe existing retransmission consent rules – set by the government almost 20 years ago – have not kept up with a changing marketplace,” Britt noted. “The rules are outdated, and they’re in urgent need of reform in order to avoid more public battles.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Britt Calls for Cable Content Dispute Resolution Process 11-23-10.flv[/flv]

Time Warner Cable CEO Glenn Britt told Bloomberg News the company wants to reform the retransmission consent dispute process.  (3 minutes)

Sinclair Broadcasting is threatening to pull 33 television stations in 21 cities from Time Warner Cable customers on January 1st if the cable company doesn’t agree to demands to pay around 20-25 cents per month per subscriber for each of the stations, primarily Fox and MyNetworkTV affiliates.

It’s just the latest in a series of retransmission rights battles underway between broadcasters and cable companies over cable carriage agreements.

Sinclair is a major group owner of television stations, and the impact on viewers in places like western New York, Dayton, Ohio, Greensboro, N.C., San Antonio, Tex., and Pittsburgh, Pa., won’t be missed because these markets have multiple Sinclair-owned or programmed stations involved in the dispute.

As always, the dispute is about money.  This week, viewers of affected stations, including our readers Lance and Andrew, started being annoyed with repeated warnings scrolled at the bottom of screens about the potential loss of their “favorite stations.”  In the case of WUHF, viewers might have thought a serious weather warning was being issued as text crawled against a distinctive red background.

So far, the dispute has not infected Sinclair’s local newscasts, which have often been used as a sounding board for the company’s past retransmission consent fights.  But then, many Sinclair stations have abandoned producing local news themselves over the past few years as a cost-savings measure.  However, many of the stations involved have put the dispute high on their home pages, as a too-cute-by-half link: “Learn About Time Warner Cable’s Plans to Drop Carriage Of This Station.”  Sinclair leaves no doubt about who they blame for the debacle.

Stations Impacted

• AL  Birmingham — WTTO (CW)
• AL  Birmingham — WABM (MyNetworkTV)
• FL  Pensacola — WEAR (ABC)
• FL  Tallahassee — WTWC (NBC)
• FL  Tampa — WTTA (MyNetworkTV)
• KY  Lexington — WDKY (Fox)
• ME  Portland — WGME (CBS)
• MO  Girardeau — KBSI (Fox)
• NC  Greensboro — WXLV (ABC)
• NC  Greensboro — WMYV (MyNetworkTV)
• NC  Raleigh — WLFL (CW)
• NC  Raleigh — WRDC (MyNetworkTV)
• NY  Buffalo — WUTV (Fox)
• NY  Buffalo — WNYO (MyNetworkTV)
• NY  Rochester — WUHF (Fox)
• NY  Syracuse — WSYT (Fox)
• NY  Syracuse — WNYS (MyNetworkTV)
• OH  Cincinnati — WSTR (MyNetworkTV)
• OH  Columbus — WSYX (ABC)
• OH  Columbus — WTTE (Fox)
• OH  Dayton — WKEF (ABC)
• OH  Dayton — WRGT (Fox)
• SC  Charleston — WTAT (Fox)
• SC  Charleston — WMMP (MyNetworkTV)
• PA  Pittsburgh — WPGH (Fox)
• PA  Pittsburgh — WPMY (MyNetworkTV)
• TX  San Antonio  —  KABB (Fox)
• TX  San Antonio — KMYS (MyNetworkTV)
• VA  Norfolk — WTVZ (MyNetworkTV)
• WI  Milwaukee — WVTV (CW)
• WI  Milwaukee — WCGV (MyNetworkTV)
• WV  Charleston — WCHS (ABC)
• WV  Charleston — WVAH (Fox)

Sinclair’s website warns viewers negotiations with Time Warner Cable are not promising:

Sinclair (or in some cases the licensees of the television stations not owned by Sinclair) and Time Warner are in the process of negotiating a renewal of the current agreement between Sinclair and Time Warner Cable which is scheduled to expire on December 31, 2010. Without a renewal, Time Warner Cable will no longer have the right to carry the broadcast of the television stations covered by this expiring agreement. Unfortunately, based on the status of the negotiations Sinclair does not believe we are going to be able to reach agreement on an extension of the deal. As a result, Time Warner would no longer be carrying the stations covered by the agreement with Sinclair beginning on January 1, 2011. Although some might try and characterize this as a dispute, in the end it represents nothing more than the failure of two companies to reach a business agreement, something that happens in the business world thousands of times a day.

Taking a cue from News Corp., Sinclair claims Time Warner Cable is stalling, hoping the Obama Administration will intervene and prohibit signal blackouts while negotiations are still underway.  Despite the claim the cable company is the one with the plan to drop stations, Sinclair informs viewers it is giving them early warning to help them make arrangements with alternative providers like Verizon FiOS, AT&T U-verse, or satellite companies to “avoid interruptions” in programming.

Time Warner Cable recognized the seriousness of the Sinclair dispute and has given it top billing on their Roll Over or Get Tough website.  So far, the cable company has rolled over in every dispute, eventually caving to programmer demands.  But the cable company would claim it has at least reduced the rates being demanded, or won concessions that allow subscribers to catch shows on-demand as part of its TV Everywhere project.

Because the cable industry has so far been dealt the weaker hand in these disputes, they are spending an increasing amount on lobbying the issue in Washington, right down to creating a front group that claims to represent viewers.  The s0-called “American Television Alliance,” has a mission statement that, on the surface, doesn’t wade too deep into actual solutions:

The ATVA’s mission is a simple one – to give consumers a voice and ask lawmakers to protect consumers by reforming outdated rules that do not reflect today’s marketplace.  We are united in our determination to achieve our goal: ensure the best viewing experience at an affordable price, without fear of television signals being cut off or public threats of blackouts intended to scare and confuse viewers.

The overwhelming majority of the interests represented by the ATVA are giant cable and phone companies (and two groups willing to play along when sharing common interests: Public Knowledge and the New America Foundation.)

The group filed comments petitioning the Federal Communications Commission to modify retransmission consent policy to give cable and phone companies additional tools to battle with intransigent broadcasters.  The most important, and one we agree with, is an end to the ban on importing distant network signals from nearby cities to replace those from local stations who simply dump “take it or leave it” offers on operators who then raise rates to cover ever-inflating programming costs.

As it stands now, cable systems cannot grab network stations from other cities to at least restore network programming, because FCC rules prohibit it, even if the nearby station doesn’t mind.  While that might not help Time Warner viewers in cities like Rochester, where the nearby Fox affiliates in both Buffalo and Syracuse are also owned by Sinclair, the cable operator’s extended reach made possible serving all three major upstate cities might still deliver relief by grabbing further distant Fox stations like WYDC in Corning, WFXV in Utica, or WFXP in Erie, Pa and distributing them across all three affected cities.

Unfortunately, the Fox TV network has also made it clear stations could risk their affiliation deals with the network if they were to grant retransmission consent to providers that effectively undercut other Fox affiliates.

The ATVA also wants providers to retain the right to continue carrying disputed signals so long as good faith negotiations are ongoing, and has also suggested binding arbitration as another alternative reform.  Broadcasters have rejected both.

Some of the ATVA’s proposals are worthy of merit to benefit consumer interests, but consumer groups might do better creating their own group to fight this issue, if only to keep broadcasters from dismissing the group as heavily stacked with cable and phone companies with a biased, vested interest in the outcome.

Just reviewing the FCC petition left a bad taste when they quoted everyone’s favorite “dollar-a-holler” group — the League of United Latin American Citizens, which continues to amaze with its omnipresent Zelig-performance in just about every telecommunications policy debate involving LULAC’s benefactors.

More than a few politicians are likely to accept broadcaster arguments, which would ultimately weaken the effectiveness of any reform effort.