Time Warner Cable suspends CBS programming blackout

Updated at 9:35 p.m. PT with a Time Warner Cable spokesperson saying it has suspended the programming blackout at CBS's request.
Updated at 4:09 a.m. PT July 30 with new deadline extension until 2 p.m. PT Friday.

After weeks of talks and multiple deadline extensions, CBS and Time Warner Cable failed Monday night to come to terms on fees the cable company must pay to carry the broadcaster's programming in some major U.S. cities, and the cable giant began removing shows like "Under the Dome" from its subscription lineup.

But minutes later, the two sides reversed. Time Warner said it was putting its plans to drop carriage on hold at CBS's request, and CBS said the two sides were going to continue discussions.

Early Tuesday morning, a spokeswoman for the cable giant reported that both sides agreed to an extension until 2 p.m. PT Friday while they continue negotiations.

Before the bizarre backpedaling, both sides appeared to reach an impasse, trading accusations and appearing to put in motion the first ever instance of CBS's flagship network losing carriage on a pay-TV provider's service.

Time Warner Cable spokeswoman Maureen Huff said CBS's "outrageous" fee demands forced it to cut off the network's programming for many of its customers as of midnight ET.

"As of midnight ET, Time Warner Cable customers in New York City, Dallas and Los Angeles will no longer receive their local CBS broadcast stations," Huff said in a statement. "In addition, we have been forced to remove Showtime, TMC, Flix and Smithsonian from our lineups across the country. We offered to pay reasonable increases, but CBS' demands are out of line and unfair -- and they want Time Warner Cable to pay more than others pay for the same programming."

In turn, CBS said it did everything it could to forge a fair agreement and accused Time Warner Cable of misleading the public about their contract talks.

"They continue to engage in a public campaign of disinformation and voodoo mathematics (featuring wildly inflated percentages) while doggedly restating their positions," CBS spokeswoman Shannon Jacobs said in a statement. She added that "Time Warner Cable seems incapable of accepting the concept that the value of a company's programming should be in line with its popularity" and that CBS would keep working to get "fair compensation" and all its resources to alert Time Warner Cable subscribers of the company's "short-sighted, anti-consumer strategy."

CBS also said it hoped an agreement between the two companies could be reached soon.

CBS Corp., which is the parent company of CNET, has been negotiating a new carriage pact with Time Warner Cable for its flagship network under multiple extensions to their previous agreement that expired June 30.

By failing to reach an agreement on retransmission fees -- money that CBS requires from TWC to carry the channel for its subscribers -- customers in New York, Los Angeles, and Dallas could lose the flagship channel and all of Time Warner Cable's customers could lose CBS-owned Showtime as well.

Time Warner has said it is fighting a 600 percent markup on fees compared with what it pays in the rest of the country, saying this is an unreasonable and unprecedented price that it is negotiating down on behalf of its customers. CBS has said Time Warner Cable won't negotiate the same sort of deal that all other cable, satellite, and telecommunications companies have struck with the network.

Past instances of blackouts over programming costs inevitably end with the two sides coming to a settlement. Around this time last year, DirecTV and Viacom ended their nine-day blackout over the costs of carrying channels like Nickelodeon and MTV, for example.

If a blackout does occur, the questions are when will it end, what is the damage and to whom. CBS's first NFL broadcasts come in late August, with the fall television season right around the corner the following month. If popular summer shows like "Big Brother" and "Under the Dome" are dropped, Time Warner Cable will find it more difficult to keep up a hard line against CBS when professional football and the regular television season roll around.

The damage of a blackout could cut both ways. CBS would lose viewership of its shows, which hurts ratings and the ad rates it can request from marketers. Time Warner runs the risk of losing subscribers.

However, customers who lose CBS stations have online options. Time Warner has gone so far as to encourage New York customers to explore Aereo, the online streamer of over-the-air broadcasts, to pick up the broadcasts that have been dropped from its cable packages. Many CBS shows are available on the network's own Web site, typically for a limited window of time, and Amazon Prime customers can watch "Under the Dome" on its Instant Video service four days after they run.

And don't forget, you can always just get your own antenna.

CNET's Steven Musil contributed to this report.