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Bright House To Drop Channels

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By RICH MULLINS

rmullins@tampatrib.com

Published: January 1, 2009

TAMPA - Customers of Bright House Networks in the Tampa Bay area might have some dark channels this morning.

Nickelodeon, MTV, Comedy Central and 11 other channels in the Tampa Bay market were scheduled to stop airing on Bright House at 12:01 this morning if media giant Viacom Inc. and Time Warner Cable Inc. failed to reach a new fee deal by then.

Late Wednesday, no agreement had been reached.

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.

The impasse over carriage fee increases would mean "SpongeBob SquarePants" and other programs such as "The Daily Show" will be cut off to 13 million subscribers nationwide, according to Time Warner Cable.

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 in the fee dispute, 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.

Viacom has asked for fee increases of between 22 percent and 36 percent a channel, an amount that could increase customers' cable bills, said Alex Dudley, a vice president at Time Warner Cable, the nation's second-largest cable operator. Viacom spokeswoman Kelly McAndrew said the requested increase was in the 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. The company said 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," McAndrew said. The network operator also intends to tell viewers about the dispute in TV ads in 11 major markets.

Viacom took out a full-page advertisement in The Tampa Tribune and other newspapers Wednesday 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.

Bye-Bye channels

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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