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The Honolulu Advertiser
Posted on: Tuesday, January 5, 2010

Oceanic says programming fee deal is near

BY Rick Daysog
Advertiser Staff Writer

Oceanic Time Warner Cable said it is close to an agreement with the owners of KHNL, K5 and KGMB over programming fees and doesn't expect interruptions to the stations' broadcasts on Oceanic.

The cable company's three-year agreement with Alabama-based Raycom Media Inc. and Virginia-based MCG Capital Corp. was to expire at the end of 2009 but was extended until Jan. 15 to work out the details of a new contract.

The extension comes as Oceanic has taken out legal advertisements in the local daily newspapers informing consumers that it may be required "to cease carriage" of KGMB, KHNL, K5 and other syndicated and network-affiliated programming.

"We have an extension and (talks) are going well," said Alan Pollock, vice president of marketing at Oceanic.

"We don't anticipate any problems but it has not been nailed down yet."

KHNL and K5 are owned by Raycom and MCG owns KGMB. In October, the three stations merged their newsrooms, laid off about a third of their staff and began running simulcast news programs.

Critics have said the newsroom merger reduced the quality and quantity of news and gave the stations more leverage when negotiating contracts with advertisers and cable operators.

Raycom has said the deal is necessary to prevent one or two of the three stations from going under during a severe downturn in the local television advertising market.

Paul McTear, Raycom's CEO, said he believes the companies "have the makings" of a new contract, which will likely be for more than three years.

When a television station withholds its broadcast signal, it not only hurts the cable operator but it also hurts the station, McTear added.

In December, Oceanic ran full-page advertisements in Honolulu's dailies saying they faced fee increases of up to 300 percent to carry local and network programming.

The ads, part of a national campaign by Oceanic's parent Time Warner Cable, asked consumers if the company should play hardball with programmers or roll over and pass on the increased fees to subscribers.

In other ads it targeted tough negotiations with Fox and noted that eight channels here might be affected. An agreement was later reached.