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TELECOM REPORTER

Yesterday afternoon, there were roughly 3.1 million Oscar parties in jeopardy and Michelle Lemieux's happened to be one of them.

With time ticking down to the Academy Awards last night, households in parts of New York, New Jersey and Connecticut were held captive by last-minute corporate gamesmanship between the region's main cable provider and Walt Disney Co., which was threatening to black out the Oscars.

For Ms. Lemieux, it also happened to be her birthday.

"There goes my little party - my birthday party, my Oscar party," said Ms. Lemieux, 32, who lives in Hoboken, N.J.

Cablevision Systems Corp., which serves 3.1 million households in the New York area, informed subscribers by e-mail earlier that day about the likelihood of a disruption. But as her husband made appetizers and she prepped the laptop for a video-streaming session, the two corporate giants continued to issue volleys back and forth.

As advertising revenue continues to decline for broadcasters and TV content increasingly migrates online, disputes like this could become more common.

"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 (U.S.) a year for their group of networks," the cable company's e-mail read, adding that Disney was demanding $40-million more in fees. Disney has disputed both figures.

On Twitter, angry subscribers lashed out at both companies: One wrote, "They've brought us into their $40-million war."

Late in the afternoon, with mere hours left to one of the most hyped broadcast events of the year, the two companies were still issuing last-minute statements, using the tense situation as leverage.

"We're all wondering whether this is just propaganda gone wild and whether it will come on at 7:55," Ms. Lemieux said. "It sucks for all of us, because we already pay so much."

The spat is simply a sign of what's to come, analysts said. As advertising dollars dropped throughout the recession, broadcasters became increasingly desperate for revenue, like much of the traditional media. But in an era in which a lot of TV content is available for free online, cable companies are very nervous about negotiating new fees that could end up driving consumers to watch TV on the Internet.

This is not the first time Cablevision subscribers have been subjected to fallout from corporate negotiations between their provider and the broadcasters, who frequently bicker over monthly fees. An earlier dispute with Scripps Networks Interactive left Cablevision customers without HGTV and Food Network for several weeks.

Kaan Yigit, president of Solutions Research Group, said the disputes mark a significant industry shift from relying on fickle advertising revenues toward a more reliable, subscription-funded model. "Over the next two to three years, you're going to see a lot more conflict in this area," he said.

In Canada, there is frequent friction between the broadcasters and cable and satellite companies. At hearings held on the issue by the Canadian Radio-television and Telecommunications Commission late last year, some broadcasters threatened to black out channels.

However, consolidation between cable providers and broadcasters in Canada has made this type of high-stakes brinksmanship less likely, an analyst said yesterday.

"The cable companies here are broadcasters themselves," said Iain Grant of telecommunications consultancy the SeaBoard Group.

"To ABC in New York City, there is probably no other place to find the Oscars, other than online. But here, if we were to lose House on Global, we would find it on Fox."

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