Cablevision Loses ABC Content Hours Before Oscars

It appears that many an Oscar party in the New York area might be ruined tonight. ABC pulled its programming from Cablevision early Sunday morning after the two companies failed to come to an agreement over licensing fees.

"We regret to inform you that ABC's parent company has decided to pull WABC-7 off Cablevision, even though we pay them more than $200 million dollars a year for their group of networks," Cablevision said in an e-mail to customers.

"Cablevision has once again betrayed its subscribers by losing ABC7, the most popular station in the tri-state area," ABC said on a Web site dedicated to the dispute, SaveABC7.com. "This follows two years of negotiations, during which we worked diligently, up to the final moments, to reach an agreement."

Earlier this month, that it would remove its programming from Cablevision on March 7 if Cablevision did not increase the amount it pays the network in licensing fees.

ABC argued that Cablevision charges its customers for access to ABC content but does not give ABC any of that money. Cablevision contends that it already pays Disney more than $200 million per year and that Disney now wants an extra $40 million for the same content.

The two sides were unable to come to an agreement by the deadline, and ABC went dark just for Cablevision customers just after midnight.

"Cablevision pocketed almost $8 billion last year, and now customers aren't getting what they pay for -- again. It's time for [Cablevision chief executive] Jim Dolan and the Dolan Family Dynasty to finally step up, be fair, and do what's right for our viewers," Rebecca Campbell, president and general manager of ABC-7, said in a statement.

"In light of these economic times we do not feel it's appropriate for ABC to hold our viewers hostage in pursuit of undeserved millions," Cablevision said.

Cablevision urged its customers to e-mail ABC about the situation at cablevision.com/abc. The company said it is "working hard to get WABC-7 back on the air," but recommended customers buy digital antennas or watch ABC on Hulu and ABC.com in the interim.

ABC was in a less forgiving mood. "Cablevision betrays their customers again!" reads the company's Web site. "You have choices. SWITCH NOW."

ABC included links to Verizon FiOS, DirecTV, and AT&T U-verse as alternatives to Cablevision. Many of Cablevision's 3.3 million customers, however, live in the New York metropolitan area. While AT&T's U-verse is available in Connecticut and 21 other states, it is not available yet in New York or New Jersey. Verizon, meanwhile, continues its buildout of FiOS throughout the country, but FiOS availability in all five boroughts of New York City, for example, is . DirecTV is a satellite provider.

This is not the first time cable channels have gone dark on Cablevision. Scripps Networks Interactive from Cablevision on New Year's Day over a similar licensing dispute. Viewers lost the channels for three weeks until the two sides .

Time Warner Cable customers almost lost Fox on New Year's Eve, too, but a last-minute extension and round-the-clock negotiations . Scripps also continues to negotiate with Time Warner over fees, but its content remains on the provider's lineup.

ABC and Cablevision were unable to reach a deal that would allow ABC to remain on the air while negotiations continued.

Angry customers took to Twitter to vent their frustration. In the New York area, the terms Cablevision, ABC, and FiOS were already trending at 8:30am, most of them upset about the possibility of missing Sunday night's Academy Awards telecast.

"I might camp out in the electronics section of Walmart to watch the Oscars," one person tweeted.

"Why do content providers treat #cablevision like their whipping boy? We need a good sharks v jets street fight to settle this," commented another.

Washington also got involved. Sen. John Kerry, a Massachusetts Democrat and chairman of the Senate Commerce subcommittee on communications, technology, and the Internet, said in a statement that it is not his place to pick sides, but he is bothered that "consumers are collateral damage in a fight between two companies."

"I strongly urge these two companies to sit down and find a way for the signal to be restored today and negotiate in good faith," Kerry said. "If a true impasse is reached, then I urge the parties to seek the assistance of the FCC to resolve it or enter into arbitration."

"This is the latest example of consumers getting caught in the middle because the high stakes incentives created in these negotiations are not working for the average customer who just expects their programming to be there when they want it," Kerry concluded.

The American Cable Association, which represents small cable providers, said the issue highlights the need to reform retransmission consent – the policy that allows TV stations to negotiate with cable providers over fees.

"ACA urges the Federal Communications Commission to heed the calls of members of Congress and take every action now to restore the ABC signal while the parties continue to engage in good faith negotiations, and then to focus on addressing the underlying problems with the broadcast carriage rules and regulations in order to avoid these problems from happening in the future," the group said in a statement.

UPDATE: Campbell said ABC sent Cablevision a new proposal around 2:30pm Eastern time and is "awaiting their response."

"If Cablevision is serious about doing right by their customers and returning ABC7 and its programming to them, then they need to act now. The ball is in their court," she said.

The FCC is also keeping tabs on the situation.

"The FCC is in contact with representatives of both companies and is monitoring the situation closely. Consumers should not suffer due to the inability of these two companies to successfully negotiate a deal," William Lake, chief of the FCC's media bureau, said in a statement. "We urge both parties to quickly reach a resolution for the benefit of viewers."

UPDATE 2: Cablevision said it will accept binding arbitration, which would return ABC to Cablevision customers while the two sides negotiate. ABC has not yet responded, but when Time Warner Cable tried binding arbitration with Fox back in December, on the grounds that it often "looks to the past, not to the future," Fox said.

UPDATE 3: ABC .