Dispute threatens blackout of KHON on cable

KHON-TV is advising viewers of the Fox network affiliate or its CW network affiliate via Oceanic Time Warner Cable that the stations may be blacked out for most of Hawaii on May 31 if negotiations for a new retransmission contract are not successful.

Cable and satellite TV providers pay for broadcast content, which historically is higher-rated than cable programming.

"KHON Fox and CW are important assets to the local community, and we only want what is fair, so we can continue to serve our viewers," said Kristina Lockwood, KHON president and general manager. "We posted the notice this morning on our website because it is our duty to keep our viewers informed," she said Wednesday.

At issue is the retransmission consent agreement between KHON parent company LIN TV Corp. and Oceanic parent Time Warner Cable that allows the cable company to carry programming from the Fox and CW networks in Hawaii, as well as other network affiliates in 13 other markets.

"While LIN Media is new to Hawaii, they are demanding a price increase of over 50 percent just two years after demanding another colossal price hike in other Time Warner Cable markets," said Bob Barlow, Oceanic Time Warner Cable president. "We believe this is unacceptable, particularly when it results in no additional programming value to our cable customers."

Asked to verify the 50 percent increase negotiating position, Lockwood said, "We are asking for fair value, which is a lot less than what many cable networks get with far lower ratings."

Oceanic customers lost ABC network and KITV local programming for 10 days in July because of a similar dispute between Oceanic and KITV parent company Hearst Television Inc.

In 2011, LIN and Dish Network issued news releases advising mainland viewers and customers in 17 markets about the impending expiration of their retransmission agreement. On Feb. 28, 2011, Dish cited LIN’s demand for a more than 140 percent price increase, which LIN then boosted to 175 percent, Dish said March 5, after LIN stations were blacked out.

LIN stations were restored to Dish March 13 and terms of the agreement reached were not disclosed.

"In some of our other markets LIN removed their stations from our customers’ lineups for 25 days" in 2008, Barlow said.

While cable and satellite companies must pay or reach other consent agreements to carry broadcast stations’ otherwise free over-the-air content, signals are difficult for Hawaii viewers to receive, especially after the January 2009 conversion to digital TV broadcasting from analog.

Cable subscriptions make up 85 percent of the statewide TV audience, Lockwood said, citing data from TV ratings service Nielsen. Direct broadcast satellite providers Dish Network and DirecTV split 9 percent of the market while viewers who watch digital, over-the-air TV for free measure only 5 percent, she said.

KHON is encouraging viewers to call Oceanic to express concern about possibly losing the station’s programming, and its website offers alternatives to Oceanic, including Hawaiian Telcom, DirecTV and Dish Network, as well as the difficult over-the-air option.

"We will definitely be tracking the number of calls we get related to this and are always concerned about what our customers are thinking," Barlow said, "but in the end it is hard to say just how much influence calling or emailing either Oceanic or KHON has on the outcome of the negotiations."

Because the agreements are private business deals between broadcasters and other companies, the Federal Communications Commission does not play an active enforcement role in retransmission disputes.

Many networks stream prime-time shows via their websites, and other local stations stream some, if not all their local newscasts online. KHON’s 6 p.m. weekday newscast is simulcast on KSSK-AM 590.

There is some question as to the timing of the stations being pulled from the cable system, should talks fail.

"I am trying to get a clarification on the timing," Barlow said. "KHON seems to think it is 11 a.m. our time, we think it is 5 p.m. Hawaii time."

Negotiations are taking place on the mainland and the time difference made getting clarification impossible Wednesday afternoon.