Time Warner Cable Finds Olympic Fail-Safe
Swimmer Michael Phelps and sprinter Usain Bolt are set to go for high-profile speed records in the Olympics. With them in mind, one could say Time Warner (TWC) has pulled its own fast one.
While prepping for a potential impasse in a carriage dispute with Hearst Television impacting markets such as Cincinnati, TWC looked to London as it crafted its strategy. The cable operator took pains to ensure that if Hearst pulled its NBC affiliates off TWC’s systems, customers wouldn’t miss Olympic coverage starting in late July.
The impasse has come. So, TWC is importing feeds from NBC stations elsewhere. TWC customers in Cincinnati and Greensboro, N.C. are receiving the NBC affiliates from Terre Haute, Ind. and Wilkes-Barre, Pa., respectively.
The same NBC replacement approach is in place for TWC customers in the Plattsburgh, N.Y. and Moultonborough, N.H. areas. And, in the large market of Orlando, Fla.
There, the Hearst station is carried on the Bright House cable system, but TWC is Bright House’s negotiator.
While it may be bizarre that Greensboro viewers of WXII are getting the local news from Northeast Pennsylvania’s WBRE, they aren’t missing NBC's “America’s Got Talent” and “Law & Order: SVU” in prime time. And, they won’t miss Phelps and Bolt in a few weeks, presuming Hearst stations remain off TWC that long.
Actually, it won’t happen. The dispute will be settled by July 27 when the Olympic flame is lit.
Neither Hearst nor TWC want to give Congress any more grist to complain that consumers are victims as two major corporations fight it out over profits, particularly when acts of patriotism are involved. In this case, any entanglement with American Olympic feats would surely bring a remarkable display of bipartisan rancor. (The opposite might be the case with an examintaion of the current Viacom and DirecTV blackout battle; no Republicans are going to be upset about the lack of “The Daily Show.”)
But Congressional anger isn’t the main fear at a Hearst or TWC. It's the prospect legislators could take action that hurt both programmers and distributors.
In the meantime, how has TWC pulled off this legerdemain and found an Olympic fail-safe? Its lawyers appear to have found loopholes in agreements the company has with both Hearst and Nexstar. (It engaged in a similar tactic two years ago.)
In order to prevent the out-of-market importation of station feeds, stations must file notices with cable operators asserting so-called nonduplication rights. And Hearst may not have filed for the safeguard with TWC in its NBC and other markets.
Hearst can move to sign a contract enacting the rights now, but there would be a 60-day waiting period before a contract could be signed. The Olympics will be long over.
TWC would not comment on importation issues. Hearst did not provide comment.
The Hearst-TWC dispute encompasses more than the NBC stations in five communities. In total, 12 communities are affected.
In Louisville, viewers of CBS station WLKY are receiving the feed of the Rochester, N.Y. CBS outlet.
In the remaining markets -- including Boston, Pittsburgh and Kansas City with Hearst-owned ABC affiliates -- TWC has not gone with signal importation and allowed blackouts to go forward. It's not clear why -- whether a technological issue or another matter.
All of the stations TWC is delivering into other markets are owned by Nexstar. TWC believes Nexstar failed to prevent the transport in its arrangements with the cable operators. Nexstar says no way.
TWC used the importation strategy looking to gain leverage in 2010. Then also, Nexstar's WBRE was a potential trump card.
TWC brought the station to Utica, N.Y. while in a dispute with Smith Media. (Nexstar filed a complaint with the FCC.) Also in 2010, in a dispute with Sinclair, TWC suggested it would go with an importation approach before a deal was struck.
Looking in reverse, whatever happens with the Hearst stand-off, the Olympics will be exported to TWC homes from London.