CBS, Time Warner Dispute Update: CBS Rejects Two Proposals Offered by Time Warner

Time Warner Cable reached out to CBS on Wednesday afternoon in an attempt to bring an end to the dispute that prompted a blackout for CBS and Showtime for thousands of Time Warner subscribers. According to Eric Mangan, the director of public relations for Time Warner, Time Warner Chairman and CEO Glenn Britt sent a letter to Les Moonves, president and CEO of CBS Corp. in an effort to resolve the standoff. According to Time Warner, the letter contained two "customer-friendly proposals" for CBS' consideration, including the option to make its stations available on an a la carte basis and an extension of current contractual terms. However, CBS pushed back with a clear refusal to re-enter negotiations.

Mangan commented on the recent setback, saying, "Our efforts to get CBS programming back for our customers are sincere, and we have offered two proposals to accomplish that, while CBS has offered nothing in return."

In the letter to Time Warner, Britt wrote, "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."

The letter continued with Britt breaching the possibility of an a la carte option. "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."

The letter continued that upon an agreement to the terms, Time Warner would immediately resume carriage of CBS and CBS owned stations, including Showtime. Time Warner further demanded that CBS resume customers' access to CBS.com, saying, "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."

Britt added that the conduct is "abhorrent in that CBS is using this blocking to punish TWC's Internet customers." The letter concluded with the statement that Time Warner is ready to engage in talks with CBS to start the paperwork on negotiations.

Entertainment Weekly reports that CBS responded with a firm refusal to resume talks, calling Time Warner's proposal a "sham" and a "public relations vehicle" that is being used to distract from the fact that Time Warner is failing to fairly negotiate with CBS.

"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," CBS released in a statement.

Mangan added that Time Warner is dismayed at CBS' rejection of both proposals. "We cannot understand why that is not enough for CBS," Mangan said. "We're disappointed in their lack of responsiveness, particularly to our request for them to quit unfairly blocking the free content available on CBS.com from our Internet customers."

Time Warner says that they will continue to try to reach an agreement with CBS, despite the recent setback. "We hope they will return to the table to negotiate in good faith on behalf of our customers and their viewers," Mangan added.