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Bright House May Lose 14 Channels Tonight Over Impasse

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Viacom placed this ad in the Tampa Tribune asking Bright House customers to demand that the cable operator continue offering Viacom channels.

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By RICHARD MULLINS | The Tampa Tribune

Published: December 31, 2008

Updated: 12/31/2008 12:15 pm

LOS ANGELES - Customers of Bright House Networks in Tampa Bay may be switching channels as they ring in 2009.

Nickelodeon, MTV, Comedy Central and 11 other channels in the Tampa Bay market will go dark on Bright House at 12:01 a.m. Thursday if media giant Viacom Inc. and Time Warner Cable Inc. fail to reach a new carriage fee deal by then.

Bright House, a joint venture of Time Warner and Advance/Newhouse Communications, receives its TV programming through Time Warner, so any hiccup with Time Warner could affect Bright House customers.

Bright House spokesman Joe Durkin placed the blame on Viacom, saying the company is threatening to turn off the channels.

"We would want these channels to run while negotiations are ongoing," Durkin said. "We think they are trying to make up lost advertising revenue by increasing the programming fees that cable companies are forced to pay."

Verizon officials said their system is not involved, and its customers would not be affected.

Cable companies such as Bright House have extra incentive to keep popular programs on their lineup. Unlike decades past, long-standing cable companies face new competition from phone companies such as Verizon that are offering cable TV in more markets. The Tampa Bay area was among the first in the nation with such competition, as Verizon deployed its Fios cable TV service.

The impasse over carriage fee hikes would mean "SpongeBob SquarePants" and other shows such as "The Daily Show" will be cut off to 13 million subscribers nationwide, said Alex Dudley, a vice president at Time Warner Cable, the nation's second-largest cable operator.

Viacom has asked for fee increases of between 22 percent and 36 percent per channel, an amount that could increase customers' cable bills, Dudley said. Viacom spokeswoman Kelly McAndrew said the requested increase was in the very low double-digit percentage range.

"The issue is that they have asked for an exorbitant increase in their carriage fees and their network ratings are sagging," Dudley said. "Basically, we're trying to hold the line for our customer."

Viacom said the increases would cost an extra 23 cents a month per subscriber - which works out to $35.9 million more in total. It said that Americans spend a fifth of their TV time watching Viacom shows, but its fees make up less than 2.5 percent of the Time Warner cable bill.

"We make this request because Time Warner Cable has so greatly undervalued our channels for so long," it said.

"Ultimately, however, if Nickelodeon, Comedy Central, MTV and the rest of our programming is discontinued - over less than a penny per day - we believe viewers will see this behavior by their cable company as outrageous," it said.

Tense negotiations are continuing at the highest level, Dudley said.

Viacom accused Time Warner Cable of not negotiating.

"It is our sincere hope that they will come to the table and negotiate a deal," said McAndrew. The network operator also intends to tell viewers about the dispute in TV ads in 11 major markets.

Viacom has also taken out a full-page advertisement in The Tampa Tribune and other newspapers showing the lead characters from Nickelodeon's "Dora the Explorer" in tears. It reads "Bright House Is Taking Dora Off The Air Tonight!" and asks viewers to "Demand that Bright House Networks keep Nickelodeon and your other favorite channels on your TV!"

Part of the disagreement is that most of the popular shows are rerun on Web sites where Viacom collects advertising revenue that it does not share with Time Warner, Dudley said.

"We don't think that's fair," he said. "They're trying to have their cake and eat it too online, where anybody can get it for free."

Viacom has staked much of its revenue-growth prospects on its ability to extract higher carriage rates out of its cable and satellite affiliates despite an ad slowdown and weak ratings.

In the third quarter, media network revenue, which accounts for about two-thirds of the total, grew 6 percent to $2.1 billion, despite global ad revenue falling 2 percent, largely because of double-digit percentage growth in affiliate fees and the success of its "Rock Band" video game.

The channels that would be affected in the Tampa Bay market are: MTV, MTV 2, MTV Tres, VH1, Nickelodeon, Comedy Central, TV Land, Spike, Nick Toons, Noggin, Logo, Palladia, VH1 Classic, The N.

Information from reporter Russell Ray and The Associated Press was used in this report. Reporter Rich Mullins can be reached at (813) 259-7919.

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