Time Warner Calls for 'Cooling-Off' Period Before Fox Pulls Programming

"It's an ongoing war," said Carl Howe, director of media consumer research at the Yankee Group. "Distributors want as much of the money as possible, and the people who create the content want their share."

Tough Times for TV

The dispute comes at a difficult time for both companies. Cable operators such as Time Warner Cable are beginning to lose leverage with their customers because more Americans are getting their content for free on Internet sites such as Hulu.

Programmers like Fox, meanwhile, have seen advertising revenues drop because of changes in the advertising industry and the recession.

To replace lost income, programmers have begun asking cable distributors for a higher cut of subscription revenues.

Time Warner Cable, which has several contracts in addition to the Fox deal expiring at the end of the year, said some programmers have asked for fee increases of up to 300 percent.

"When a programmer comes to us and asks us for a 300 percent price increase for their content, that's what causes your cable bill to go up," said Time Warner Cable's Dudley. Programmers, he argued, already get their fair cut.

Time Warner Cable recently split off from its former parent, Time Warner Inc., which owns Time magazine, CNN and Warner Brothers.

Last year, Time Warner received $16.3 billion from subscribers, and paid $3.7 billion -- almost a quarter of that -- to content providers such as Fox.

While that seems like a small percentage, cable operators point out that maintaining a national network to deliver content is costly.

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