Break in Fox, TW battle?

Time Warner Cable is showing the first sign of taking the high road in this week's slugfest with News Corp.'s Fox Broadcasting. The cable giant's top executive says that it's willing to submit the dispute to binding arbitration before the FCC. "Time Warner Cable will agree to whatever interim steps are necessary to preserve consumers' uninterrupted access to Fox programming after our current agreement expires," TWC CEO Glenn Britt told Sen. John Kerry (the Massachusetts senator recently wrote a "Can't we all get along" letter to both companies). Fox's contract with the cable giant runs out at the stroke of midnight tomorrow night, and it's demanding that Time Warner Cable shell out a fee to keep receiving the Fox channels (11, 13, Fox Sports West, Prime Ticket and FX). No fee, no feed. From Dow Jones:

Miller Tabak & Co. analyst David Joyce said Time Warner Cable's offer is an effective negotiating tactic as the two sides seek to curry favor with consumers. "This shows that Time Warner Cable is willing to compromise," Joyce said.

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With its programming costs rising steadily, Time Warner Cable is already suffering a loss of video subscribers because of the economic downturn and rising competition from telecommunications companies, like Verizon Inc. (VZ) and AT&T Inc. (T), satellite providers and others. A service disruption could leave more customers seeking alternatives. For its part, Fox would likely suffer hefty financial losses from advertisers if it pulled its signal from Time Warner Cable, but the company is seeking more subscription revenue for its programming as the broadcast business suffers sharp declines in advertising amid the recession and the rise of digital media.

Executives from both companies are said to be slugging it out at an undisclosed location in L.A. No way of knowing what's going on behind those closed doors (and don't believe the selected leaks), but some resolution, even a temporary one, would seem likely in the next couple of days. The willingness by TWC to submit to binding arbitration could be the first step towards a face-saving cease fire.