Time Warner Cable Inc said it is willing to go to arbitration with News Corp's Fox Networks to avoid losing some of Fox's channels if the companies fail to agree on a new carriage deal.
But News Corp turned down the proposal, arguing that the issue needs to be settled at the bargaining table.
In a letter to U.S. Senator John Kerry, Time Warner Cable Chief Executive Glenn Britt said his company will agree to interim steps to preserve consumers' uninterrupted access to Fox programing after the current agreement expires on December 31.
Britt was responding to a December 22 letter from Kerry that urged a swift resolution and suggested that, in the absence of an agreement, Fox allow Time Warner Cable to continue transmitting programing through the college bowl football season either under current terms or terms that can be retroactively applied after a deal is reached.
Kerry, in his role as chair of the Senate Commerce subcommittee on communications, technology and the Internet, suggested that two sides take their dispute to arbitration. Britt welcomed that proposal.
We are willing to commence an arbitration proceeding immediately before the FCC (Federal Communications Commission), said Britt. And to prevent any disruption to consumers while the proceeding is pending, we would enter into an interim agreement with Fox.
But News Corp Chief Operating Officer Chase Carey said the arbitration looks to the past rather than the future. He said in earlier internal memo to staff that the two companies had been in fruitless talks for months and it was now likely the Fox stations would go off air.
We respectfully believe these discussions do not belong in the hands of a third party, Carey wrote in response to Kerry. We believe the appropriate solution is for Time Warner Cable and Fox to negotiate a fair and mutually beneficial deal.
Fox and Time Warner Cable are fighting a very public battle over a monthly subscriber fee for the right to carry the free-to-air Fox broadcast network.
Fox Networks CEO Tony Vinciquerra told Reuters on Tuesday that getting paid $1 per subscriber each month would be a reasonable step in the right direction.
Time Warner Cable executives have balked at the $1 fee and insiders privately point to agreements with smaller affiliate broadcast companies that have signed carriage deals for around 20 to 25 cents as fair value.
At stake for Time Warner Cable is the prospect that other broadcasters including CBS Corp and Walt Disney Co's ABC, and General Electric Co's NBC will also ask for similar cash payments. CBS has been most vocal on the issue and its CEO, Les Moonves, has publicly talked about being paid around 50 cents a subscriber.
Both sides are still in talks but if an agreement is not reached with Time Warner Cable by midnight on Thursday popular Fox shows like American Idol, The Simpsons, and NFL football could go off the air for nearly 13 million subscribers in major cities including New York, Los Angeles and Dallas.
(Reporting by Yinka Adegoke; Editing by Steve Orlofsky and Richard Chang)