July 14, 2010 / 8:45 PM / 7 years ago

AT&T slams Cablevision for "unfair" Mad Men talks

NEW YORK (Reuters) - AT&T accused Rainbow Media on Wednesday of unfair negotiations in talks to continue carrying the AMC, IFC and WE TV networks less than two weeks before Emmy award-winning advertising drama “Mad Men” returns to the airwaves.

The telephone company accused Rainbow of giving a “competitive advantage” to its parent, Cablevision Systems, which competes with AT&T’s U-verse TV services in Connecticut.

The latest season of the period drama “Mad Men” returns to AMC on July 25 as one of the main attractions of that network.

Rainbow hit back at AT&T’s claims, saying its executives spent several weeks at U-verse’s offices trying to hammer out an agreement.

“We are disappointed that AT&T is publicly threatening to take away our networks, including AMC’s ‘Mad Men,’ just days before the season premiere,” the company said in a statement.

Cable and satellite companies pay fees to cable network companies for the right to package and sell those networks to customers.

The current agreement between AT&T and Rainbow expires at midnight on Wednesday and the phone company said it has made numerous proposals.

“Cablevision’s Rainbow Media has rejected each of them, instead making unreasonable proposals that give it an unfair competitive advantage,” the company said in a statement.

AT&T U-Verse has around 2 million customers nationwide. AT&T previously said it believes Rainbow’s networks are “overpriced on a per-viewer basis” compared with other major networks.

This latest battle with AT&T puts the shoe on the other foot for Cablevision’s controlling shareholders, the Dolan family. Cablevision owns both national cable networks and cable systems in the New York area.

Earlier this year the cable distribution arm of Cablevision was involved in a protracted fee dispute with Scripps Networks Interactive over carriage of The Food Network and HGTV, which were taken off air until fees were agreed.

Fights between cable distributors and owners of the networks have worsened since the beginning of the recession. With advertising revenue still down from the highs of about three to four years ago, programmers are keen to ensure that their affiliate revenue continues to grow. Meanwhile, distributors feel additional pressure by free-to-air broadcasters to also charge for carriage rights for the first time.

No. 2 U.S. cable operator Time Warner Cable is in talks with Walt Disney Co about cable programing rights that could come to a head on September 1 if a deal is not reached by then.

Seeking to take advantage of the uncertainty, rival phone company Verizon launched an ad campaign last week for its FiOS TV service in some of Time Warner Cable’s markets.

Time Warner Cable launched its own ad campaign on Wednesday in a full page advert in the New York Times.

The advert said: “Signing up with FiOS will not protect you from a channel blackout. Verizon must negotiate their own deals with network owners. They’ll have the same choice: pay the network’s demands and pass the higher costs on to their customers, or face the threat of a blackout.”

Reporting by Yinka Adegoke; editing by Gerald E. McCormick, Richard Chang and Andre Grenon

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