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Time Warner asks US to block TV blackouts

By Kelly Riddell and Todd Shields
Bloomberg News / March 10, 2010

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WASHINGTON - Time Warner Cable Inc. plans to ask federal regulators to block broadcasters from cutting signals during fee disagreements, aiming to avoid disruptions such as Walt Disney Co.’s blackout of the Academy Awards.

The company plans to submit a petition to the Federal Communications Commission this week, according to an e-mail yesterday. Time Warner Cable will ask the FCC to consider arbitration and force broadcasters to maintain their signals during disputes.

Time Warner Cable, which trails only Comcast Corp. in US subscribers, is set to negotiate carriage fees with Disney when their agreement ends in August. Disney pulled its signal March 7 in a dispute with New York-area provider Cablevision Systems Corp., blacking out the first 13 minutes of the Oscars for more than 3 million customers in New York, Connecticut, and New Jersey.

Disney restored the WABC-TV signal to Cablevision after the two came to a preliminary agreement that night. Disney may use the tactic again if it can’t reach a deal with Time Warner Cable once their agreement expires in August, according to analysts such as Wunderlich Securities’ Matthew Harrigan.

DirecTV, the largest US satellite-TV provider, and Verizon Communications Inc., the second-largest US phone company, also signed the petition, as did Cablevision and rural cable provider Mediacom Communications Corp.

Time Warner Cable, which has about 13 million US subscribers, rose 10 cents to $49.10 yesterday in New York Stock Exchange composite trading. Disney advanced 12 cents to $33.31.

Zenia Mucha, a Disney spokeswoman, didn’t immediately return a message seeking comment. Cablevision spokesman Jim Maiella and FCC spokeswoman Jen Howard declined to comment.

Broadcasters have said stations deserve compensation for supplying TV’s most-watched shows, including “NCIS,’’ “Sunday Night Football,’’ and “Desperate Housewives.’’ In the past, the networks traded those rights to gain distribution for new cable channels, like Disney’s ESPN2, or higher fees for their existing cable networks.

Cable operators have balked at the fees because people can typically watch these programs for free on TV websites such as Hulu.com or over-the-air broadcast.