Time Warner Cable CEO vows to end CBS blackout, proposes a-la-carte pricing (update: CBS calls proposal a 'sham')

Zach Honig
Z. Honig|08.05.13

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Zach Honig
August 5th, 2013
Time Warner Cable CEO vows to end CBS blackout, proposes a-la-carte pricing (update: CBS calls proposal a 'sham')

Time Warner Cable CEO Glenn Britt today sent an open letter to CBS CEO Leslie Moonves today, expressing a desire to resume negotiations and end the current programming blackout. In the document, which was reportedly received by CBS executives at the same time it was sent to reporters, Britt proposes that TWC make the network's stations available to consumers with an a-la-carte pricing model -- the cable company will hand over the entire tariff to CBS. While the terms are being discussed, Britt expects CBS to give permission to resume broadcasts immediately, and to re-enable CBS.com access for TWC internet subscribers as well. The bizarre "open" nature of this letter makes it possible to conclude that today's action was simply a public-relations ploy, giving the impressions that Time Warner is being generous by bringing this peace offering to the table. We imagine the situation is significantly more complex than this single-page letter would make it seem, however.

Update: CBS has provided a short response to the letter, calling a it "sham" and an "empty gesture." For the complete war of words, check out both the letter and response in full after the break.

[Photo by Jonathan Fickies/Bloomberg via Getty Images]

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Time Warner Cable CEO Glenn Britt Letter to Les Moonves

NEW YORK--(BUSINESS WIRE)--Time Warner Cable sent the following letter today to CBS Corporation President & Chief Executive Officer Leslie Moonves:

August 5, 2013

Mr. Leslie Moonves
President & Chief Executive Officer
CBS Corporation
CBS Headquarters
51 West 52nd Street
New York, NY 10019

Dear Les,

In the interests of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts. Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers.

Alternatively, if you are unwilling to agree to this proposal, we would also be willing to resume carriage by allowing CBS to make its stations available on an a la carte basis at a price and on terms of its choosing, with 100% of that price remitted to CBS. This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.

In connection with both of these proposals, we would expect you to allow us to immediately resume carriage of your CBS stations (and other CBS-programming services) on retroactive terms as we work out any necessary details. The extension would be ongoing to make sure consumers are not once again held hostage by CBS during this process. We expect, though, that since each of our proposals is very straight forward, the papers can be completed quickly.

Finally, we call on CBS regardless of whether it accepts or rejects our proposals, to immediately cease its blocking of CBS.com content from TWC's high-speed Internet customers. Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others. This is especially so given that CBS uses free public airwaves to broadcast that content and has public interest obligations that it is plainly flouting. In addition, this conduct is abhorrent in that CBS is using this blocking to punish TWC's Internet customers across the country, including millions of consumers in cities where we continue to carry CBS on our cable systems through agreements with other CBS-affiliated stations; is blocking customers of other multichannel providers, including Direct TV, with whom CBS has no dispute; and is apparently blocking customers of certain other ISP's, to which TWC provides wholesale Internet services.

We stand ready to speak with you immediately to follow up on these matters.


Glenn Britt
Chairman & Chief Executive Officer

CBS Statement:
Today's so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith. Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn't work that way and isn't likely to for quite some time. In short, this was an empty gesture from a company that is expert at them.

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