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Cable provider shuns Big Ten Network

| Friday, Aug. 20, 2010

Many Penn State and Youngstown State followers in Greater Pittsburgh and surrounding areas aren't likely to see the season opener between the schools when college football season kicks off in two weeks, in part, because the Big Ten Network and Armstrong Cable are seemingly at an impasse.

The network and cable provider are miles apart in their negotiations. However, officials on both sides agree some progress has been made during the past three years, yet there's been little wiggle room for compromise on significant differences.

"This area is strategically an important market for Penn State," said Tim Curley, director of athletics at Penn State. "It's been a little frustrating that we've been able to clear the rest of the Big Ten footprint, yet we haven't been able to find our way (in Pittsburgh) after three years. We've got a lot of frustrated fans right now who can't get access to the Big Ten Network."

Currently, the Big Ten Network is available in 80 million homes nationwide. However, it has had difficulty clearing one of several hurdles during its negotiations with Armstrong, mostly its reluctance to accept a proposal that it be considered a premium channel such as HBO or Showtime.

"(Armstrong) will say the network is expensive and will mention they will carry the network on a different level of service," said network president Mark Silverman. "They are asking for something they know no one else has.

"We can't allow them that because all of the deals are retroactive. If you give that deal to somebody, every single deal gets changed and that would put the network out of business.

"We're in all of the top 20 television markets," Silverman added. "Our games are available in China, Latin America and Germany, but they're not available in Butler County."

The cable provider, which has more than 200,000 subscribers in the Big Ten region - including Pennsylvania and Ohio - argues that adding the network as part of its basic package will result in rate increases.

"We're very interested in the product, and have been since before it came on the air," said David Wittmann, Armstrong's vice president of cable marketing in Butler. "But we are also trying to do what's best for our customers, and that is control the price of basic cable."

Armstrong, though, has increased its rates by $8 since it first rejected offers from the Big Ten Network in 2008. Comcast, among the first cable providers to partner with the network, has increased its rates twice in the past year.

Silverman said the Big Ten Network has secured more than 300 agreements with various cable companies, including Comcast and Time Warner. The network televises both live and tape-delayed broadcast in 95 percent of the Big Ten region.

"It's been great for our customers," said Comcast spokesman Bob Grove. "The demand is there for the product."

Silverman said Armstrong is the largest operation within the network's region in which an agreement hasn't been reached. The network and Shenandoah-based Shen-Heights TV Association reached an agreement Wednesday that secures 2,000 customers in the Penn State viewing area.

"(Armstrong) decided that economically they don't want to carry the additional cost of the network," Silverman said. "What I find a little bit disingenuous is (Armstrong) will say that they don't want to raise everyone's rates, but they have raised rates every year between $2 and $3."

Wittmann said sports programming accounts for approximately 40 percent of the company's cost on basic cable. He added Armstrong has tried to negotiate a deal that won't force every customer in Pennsylvania and Ohio to pay for it.

"We do consider this niche-sports programming," Wittmann said. "As of this date, we have a philosophical difference about that, but it's always about money.

"It's hard to characterize how far apart we are. If you look at the landscape of college sports right now and what's transpired with conference realignment, almost all of that is based on money.

"We do not believe every cable customer should have to pay for the Big Ten Network," he reiterated. "It should be a choice. This has a huge precedent-setting situation that every sports entity is trying to make as much money as it possibly can."

Already, the Big Ten Network generates approximately $20 million annually for all 11 Big Ten institutions.

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