Time Warner Cable Inc., which has engaged in retransmission consent disputes with both CBS Corp. and Journal Broadcast Group, now faces two class action lawsuits for breach of contract in Los Angeles and Milwaukee.
The suits allege that the blackout is a de facto breach of contract and demand compensation for loss of programming. One suit demands a credit of one day’s service for each day of the blackout. The suits may be legitimate as CBS has allowed continued broadcast during the negotiation process and TWC has unilaterally decided to stop the broadcast — in other words TWC has unilaterally decided to not provide services they advertise and promise.
If TWC loses any of these suits, aggregators will negotiate content contracts from a weaker position. One possible outcome is that TWC offers to ‘carry’ CBS for a fee. In this scenario, CBS sells content and pays TWC for delivery. This, of course, opens the doors to a brave new world of a la carte programming and competition that will improve programming quality while driving down costs for consumers. Right?