Big Ten Network, Comcast finalize deal; no quick Charter-BTN deal seen

Jeff Richgels  —  8/23/2008 5:56 pm

As expected, the Big Ten Network and Comcast Corp., the nation's largest cable company, finally have reached a carriage deal.

But while the deal announced by BTN and Comcast in a news release Thursday may provide a potential framework for deals between BTN and Charter Communications and Time Warner, Wisconsin's two major cable providers, a UW-Madison professor of telecommunications who follows cable issues closely is pessimistic about deals being done in time for the 2008 college football season.

The University of Wisconsin's first football game is Aug. 30 -- ironically the one-year anniversary of the launch of BTN.

"I think they're going to be really, really lucky to get it done by football season," Prof. Barry Orton told The Capital Times. "It means they have to turn this around in a month and a half or so. That's tight. I would think we're safer to say (a deal will be done) probably by basketball season and maybe by the end of football season."

Orton said the Comcast-BTN deal should break up the logjam that has existed between the region's major cable companies and BTN, but, "Charter has its own challenges that Comcast doesn't have."

Orton noted St. Louis-based Charter's roughly $20 billion debt load, which he said could hinder the company's ability to afford a deal with BTN.

A Comcast deal is seen as providing a potential framework for deals between BTN and Charter and Time Warner because Comcast is the nation's biggest cable company.

"It's Comcast first, Time Warner a distant second, and Charter third," Orton said of the size and pecking order of major cable companies serving states in the Big Ten Conference.

Charter spokesman John Miller was traveling Thursday and didn't want to comment in detail until he could learn more about the Comcast and BTN deal.

"And all we probably will get are media reports regarding this (deal) because other cable operators don't share the terms and conditions of agreements they sign," Miller said. "So there's not much more we can do to react to that announcement."

Miller said Charter remains in ongoing negotiations with Fox Sports, the minority owner of BTN, which is majority owned by the Big Ten Conference.

"Our goal remains what it has been: to negotiate the best possible deal with them we can on behalf of our customers," Miller said.

Miller added that, with the Comcast deal done, he hoped Fox Sports now would have more time to focus on negotiations with Charter, the Madison area's dominant cable provider.

According to multiple media reports, Comcast has agreed to pay about 70 cents per subscriber to BTN, which had sought $1.10, a figure it has received from some smaller cable companies.

According to a news release from Comcast and BTN, the multiyear agreement will have BTN airing on expanded basic Aug. 15 in Comcast territories in states with Big Ten schools: Ohio, Pennsylvania, Illinois, Indiana, Michigan, Minnesota and Wisconsin. Comcast's Wisconsin territory is in the northwest portion of the state.

Comcast doesn't have any subscribers in Iowa, the eighth Big Ten state.

Outside the Big Ten states, Comcast can carry BTN on any level of service, including its Sports Entertainment Package. That was a BTN offering from the beginning.

After the 2008-09 basketball season ends, Comcast may move BTN to a "broadly distributed digital level of service in most of its systems in the Big Ten states," the news release states. That would exclude a sports tier that requires an extra fee, unless such a tier were defined to be broadly distributed.

BTN had refused to agree to a deal that didn't include expanded basic carriage - an analog service - in Big Ten states, but that has become less of an issue as large numbers of cable customers migrate to digital service to take advantage of bundled offerings from cable companies that include digital TV, high-speed Internet and phone service.

In their quarterly earnings reports, cable companies consistently have been reporting losses of analog customers but gains in digital customers numbering in the tens of thousands.

Comcast, for example, has more than two-thirds of its customers taking digital and about 80 percent in the Big Ten states.

In all, the Comcast deal will nearly double the number of homes that can access the BTN, from 30 million to 55 million. In the eight-state Big Ten footprint, the number will surge from 6.5 million to about 13 million.

BTN President Mark Silverman said in a statement that the network is "thrilled" to have Comcast as a distribution partner, noting that the Comcast deal means BTN will be available to more than two-thirds of all homes in the Big Ten states.

Comcast customers will get BTN HD, Big Ten Network high-speed Internet content through Comcast.net, and condensed game replays and other programs through Comcast On Demand.

The Chicago Tribune reported earlier this week that Comcast and BTN had finally agreed on the terms of a deal -- more than three months after the paper reported the two sides had agreed on the framework of a deal.

BTN does have carriage deals with satellite providers DirecTV and DISH Network, as well as numerous smaller cable companies, including MHTC (formerly Mount Horeb Telephone Co.), which serves the areas of Mount Horeb, Blue Mounds and Dodgeville.

The Associated Press contributed to this report.

Jeff Richgels  —  8/23/2008 5:56 pm