News Corp.'s Fox Tells Time Warner Cable to Halt Use of Channels on IPad

News Corp. (NWSA)’s Fox Networks Group told Time Warner Cable Inc. (TWC) to stop streaming cable channels including FX to its pay-TV subscribers’ iPads, saying such use isn’t authorized.

The company sent a letter demanding the New York-based cable operator stop providing the channels, Scott Grogin, a Fox spokesman in Los Angeles, said today in an interview.

News Corp. joins Scripps Networks Interactive Inc. (SNI) in challenging Time Warner Cable over transmission of live TV signals via an application on Apple Inc.’s iPad without consent. Time Warner Cable customers with Internet service are able to use the app to watch programming within their homes.

“The app continues to be available and continues to function the same as the day we launched it,” Alex Dudley, a Time Warner Cable spokesman, said in a telephone interview.

The cease-and-desist letter may be a precursor to a lawsuit filed by Fox, according to Jonathan Handel, an entertainment attorney at TroyGould in Los Angeles. The legal issues will likely focus on how the programming rights’ contracts were worded, he said.

“These cases occur under a cloud where contracts were signed in a pre-existing world when new technologies weren’t around yet,” Handel said in a telephone interview. “If they had anticipated the new technology and talked about it specifically, you wouldn’t have the problem.”

Time Warner Cable has argued there is no difference between an iPad and a portable TV because the iPad app can only be watched at home. There are 32 channels on Time Warner’s app, including Viacom Inc. (VIA/B)’s MTV, Discovery Communications Inc. (DISCA)’s Animal Planet and Comcast Corp.’s Bravo and CNBC.

First to Market

Time Warner Cable is the first cable provider to release an iPad app that streams live TV. Cablevision Systems Corp. (CVC) said it will introduce a similar product this quarter.

Jim Maiella, a spokesman for Bethpage, New York-based Cablevision, declined to say if the company had received any cease-and-desist letters from networks.

Scripps has “not granted iPad video streaming rights to any distributor and is actively addressing any misunderstandings on this issue,” according to an e-mailed statement from the Knoxville, Tennessee-based programmer.

News Corp., controlled by Chairman and Chief Executive Officer Rupert Murdoch, gained 25 cents to $17.51 at 4 p.m. New York time in Nasdaq Stock Market trading. The Class A shares have risen 20 percent this year.

Time Warner Cable rose 98 cents to $71.43 on the New York Stock Exchange and has increased 8.2 percent this year. Cablevision rose 1 cent to $34.33 and is up 1.4 percent.

To contact the reporters on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net; Alex Sherman in New York at asherman6@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net

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