NEW YORK (
) -- With
Time Warner Cable
at a deadlock over TV programming fees, Washington will likely force a resolution.
. Fox threatens to open the New Year with a blackout of its shows on the nation's No.2 cable network that serves key markets like Los Angeles and New York and has even encouraged viewers to switch to satellite TV providers like
Fox's American Idol
The battle comes at a particularly critical time for cable shops like
and Time Warner Cable, which are struggling to hold on to customers who would rather watch shows free on the Internet or opt for cheaper bundles of TV, Internet and calling services from phone companies like
For its part, Comcast has made a bold move to rely less on its cable TV distribution business and
Enter the politicians.
Sen. John Kerry (D., Mass.), who chairs the Senate's Commerce Subcommittee on Communication, Technology and the Internet, has asked the Federal Communications Commission to step in to keep the Fox broadcasts from ending and arbitrate a deal between Fox and Time Warner Cable.
New Yorkers will recall a bitter three-year battle over so-called carriage fees between the all-sports
that interrupted Yankees game broadcasts. The service disruption was so severe in 2003 that New York Mayor Michael Bloomberg stepped in and brokered an initial agreement. A year later arbitrators sided with YES and required Cablevision to pay YES $2 per subscriber.
Fox is seeking a new agreement allowing it to collect $1 per Time Warner Cable subscriber for rights to carry Fox broadcasts of the upcoming college football bowl games as well as popular shows like
If the YES Network battle is any indication, political and industry forces will likely back a deal on Fox's terms, handing cable yet another defeat in what looks to be a tough future for the industry.
Cable prices keep rising and content is less relevant, says a Wall Street analyst who asked not to be named.
"The real interesting video growth is happening on the Internet," says the analyst. "Fox and Time Warner Cable can battle as long as they want -- in a few years consumers won't care."
-- reported by Scott Moritz in New York