Comcast Says It Won’t Change Hulu Relationship

Comcast said it wouldn’t change NBC Universal’s relationship with Hulu.com. The renewed promise came after a blackout by News Corp. of Fox video on the website was brought up in relation to Comcast’s deal to buy control of NBC Universal. It was Comcast’s first comment to the FCC on the Cablevision-Fox retransmission consent dispute and on News Corp.’s decision to temporarily block Cablevision broadband customers from Fox video on Fox.com and Hulu, which is partly owned by NBC Universal and News Corp. (CED Oct 19 p3).

The FCC criticized Cablevision for using PR tactics in the retrans dispute. About 18 hours later, Cablevision said it’s willing to pay what News Corp. seeks from another major cable operator for carriage of two of three blacked-out TV stations. Fox rejected the offer hours after it was made.

"In the interest of Cablevision’s 3 million households and our mutual viewers” with Fox, the cable operator “made a new offer to News Corp.” Wednesday, a Cablevision spokesman said. “Simply put: We agree to pay the rate Fox charges Time Warner Cable for carriage of WNYW-Fox 5 New York and WTXF-Fox 29 Philadelphia for a period of one year. This is higher than the rate we pay any other New York broadcast station.” Cablevision had told the FCC that News Corp. wanted the cable operator to pay it the same rate for WNYW that Time Warner Cable pays. MyNetworkTV affiliate WWOR Secaucus, N.J., which has also been unavailable to Cablevision’s video subscribers, wasn’t mentioned. A Cablevision spokesman had no comment on WWOR.

Cablevision’s offer is “incomplete,” “not acceptable” and “yet another in a long line of publicity stunts” and was made to the broadcast network as the terms were released to the media, Fox said. “Cablevision is seeking a discounted ‘package rate’ without buying the entire package,” the network said. “We have told Cablevision all along we are willing to negotiate a deal -- based on an entire suite of channels -- under the terms we have reached with Time Warner Cable and other providers, or a stand alone agreement” for WNYW, WTXF and WWOR, it added. Cablevision is “very disappointed,” a spokesman said.

The criticism from the commission came after Cablevision CEO James Dolan said he would go Wednesday to FCC Chairman Julius Genachowski’s office to meet with News Corp. President Chase Carey to hammer out a retrans deal, if Genachowski called a meeting. “Based on the negotiations to date, I can assure you that only with your assistance in bringing the parties together in your office” could “good faith talks” occur, Dolan wrote Genachowski. He said he would “come ready with new, constructive offers, prepared to reach agreement."

"It’s encouraging that Cablevision has a new ‘constructive offer’ and is prepared to negotiate in ‘good faith,'” a senior FCC official told reporters Tuesday night. “But they should spend less time writing publicity-seeking letters to the FCC, and more time at the negotiating table reaching an agreement. Consumers deserve no less and the law demands it. That’s the only way to get programming back on the air. By now the message from the FCC should be crystal clear: Stop the stunts and start negotiating.” A Media Bureau spokeswoman declined to comment on Cablevision’s new offer.

As “the government agency charged with protecting television consumers and oversight of broadcast licenses, we do not understand how protecting and interceding on behalf of TV viewers in 3 million blacked out households in the Northeastern United States does not fall under the FCC’s purview,” a Cablevision spokesman said. “The FCC has the facts and our customers are demanding that the FCC act.” The cable operator repeated its claim that Fox isn’t negotiating in good faith. “The parties’ respective responses make two points perfectly clear: News Corp. has negotiated in utter bad faith and this matter is at an impasse,” Cablevision Chief Operating Officer Tom Rutledge wrote Bureau Chief Bill Lake late Tuesday in a second reply (http://xrl.us/bh5u4i) to a letter from the official asking about the talks.

Review of the Cablevision-Fox letters by career Media Bureau staffers continues, and they don’t appear to have decided how to proceed, agency officials said. On another potentially looming carriage dispute, between Fox’s TV stations and Dish Network, the sides haven’t started communicating yet with commissioners’ offices, agency officials said. That makes it hard to tell if talks for a retrans contract to replace one expiring Oct. 31 between the companies will be successful. A Dish spokeswoman had no immediate comment.

Cablevision is “incorrect in all instances” when it alleges that retrans rules were broken during the talks, Michael Hopkins, president of Fox affiliate sales and marketing, wrote Lake. “Fox has at all times during its negotiations with Cablevision conducted itself in full compliance with its obligations to engage in good-faith negotiations.” The dispute has been over money, and “disagreements over price are not bad-faith negotiating,” a supplement said (http://xrl.us/bh5u4e).

The blocking of Hulu and Fox.com is unrelated to what the cable operator will do with the website after buying control of NBC Universal, Comcast said. The company still “has no intention of changing NBCU’s relationship with Hulu or NBCU’s decision to provide certain of its content to Hulu,” it said in a filing posted Tuesday to docket 10-56. “While the facts of how Hulu came to be briefly caught up in the larger dispute between News Corp. and Cablevision are unclear, that episode has nothing to do with the combined entity’s future relationship with Hulu.”

Recent filings “speciously attempt” to link the Cablevision-Fox retrans blackout to the merger, Comcast said. “These recent filings are relevant only to the extent they reveal that certain of the transaction’s opponents apparently believe that every dispute that arises anywhere in the video programming industry -- even between two unrelated third parties -- is somehow germane to the proposed transaction. With their ripped-from-the-headlines form of advocacy, these commenters would have the Commission abandon its long-standing policy of addressing only transaction-specific issues in transaction reviews, and addressing industry-wide issues in industry-wide proceedings.” It cited a recent letter to the agency from the American Cable Association, DirecTV and Dish Network and letters from Free Press and Public Knowledge. “It would be unprofitable for the combined entity to engage in a retransmission foreclosure strategy,” Comcast said.

"Since NBC has the same control over Hulu as Fox, it could engage in the same kind of blocking as Fox did,” Public Knowledge representatives told aides to Commissioners Meredith Baker and Michael Copps, a filing said. “A merged company would have the incentive not only to engage in such blocking during retransmission negotiations, but also to block customers of competitive ISPs and” multichannel video programming distributors, Public Knowledge said. “NBC has a history of trying to leverage its online offerings into extra revenue —- it only made its recent online Olympics coverage available to some ISPs, whose affiliated MVPDs cut special deals with NBC.”