FCC chairman calls for emergency meeting with parties to resolve dispute
About 5 million Dish Network subscribers lost access to 129 local TV stations operated by Sinclair Broadcast Group across the U.S. late Tuesday, in what amounts to the largest single TV blackout in history in terms of channels dropped.
Dish said the companies had reached an agreement on rates and all other terms for the carriage of the Sinclair local stations, but that Sinclair demanded the satcaster pull its signals anyway. Dish alleged Sinclair forced the blackout because it wants to gain leverage in carriage negotiations for a cable channel — which Dish didn’t identify — that Sinclair is aiming to buy.
“We have agreed to rates and all terms to carry Sinclair’s local stations,” Warren Schlichting, Dish’s senior VP of programming, said in a statement. “But Sinclair is blacking out 129 local stations in an effort to negotiate a carriage agreement for an unrelated cable channel that it hopes to acquire, but does not own today.”
In response, Sinclair exec VP and general counsel Barry Faber said in a statement: “Dish, which is reported to have engaged in more recent station blackouts than any other MVPD, is simply trying to spin the facts in an apparent effort to make a political statement. While Sinclair, unlike Dish, is not interested in negotiating this transaction in the press, Sinclair remains willing to negotiate a fair deal with Dish.”
The blackout affects stations in 79 markets in 36 states and Washington, D.C. Most of the stations are affiliated with the Big Four networks or the CW. Separately, Dish has extended its retransmission contract for 23 local stations not controlled by Sinclair for which Sinclair handles carriage negotiations.
The two sides had reached a temporary truce Aug. 15, when their previous pact was set to expire at midnight ET, as they continued to negotiate.
In the wake of the blackout, Dish reiterated its appeal to the Federal Communications Commission to intervene in the situation. Earlier this month the company filed a complaint with the FCC accusing Sinclair of violating the good-faith covenants of the FCC’s retransmission consent rules. Dish said it intends to amend the complaint to include the allegations that Sinclair has tied the retrans talks to carriage of the unnamed cable channel.
Update: In a statement released at noon ET Wednesday, FCC Chairman Tom Wheeler said he has directed the agency’s Media Bureau to arrange an emergency meeting with Dish and Sinclair. He said the companies will have until midnight to file their views on the dispute.
“The public interest is the Commission’s responsibility,” Wheeler said. “We will not stand idly by while millions of consumers in 79 markets across the country are being denied access to local programming. The Commission will always act within the scope of its authority if it emerges that improper conduct is preventing a commercial resolution of the dispute.”
For Dish, the retrans fight with Sinclair comes after it lost a net 81,000 pay-TV subs in the second quarter of 2015, with analysts estimating it shed 151,000 satellite TV customers. As of the end of June, Dish reported 13.93 million TV customers, including those with its over-the-top Sling TV service.
Dish has a legacy of pugnacious relations with broadcast and cable TV networks. Since January 2012, Dish has been involved in 32 of the 74 retrans disputes in the U.S. that have led to stations going dark for pay-TV subs, according to the National Assn. of Broadcasters.
The FCC has said it plans to review rules regarding retransmission consent, given the uptick in battles between station groups and pay-TV providers. Cable and satellite TV providers are required by law to carry broadcast TV stations. However, the compulsory carriage requirement goes out the window if broadcasters are seeking retrans fees, which require negotiations between station owners and MVPDs.
Broadcast TV stations, which provide their over-the-air signals free to the public, have been demanding increasingly higher fees from pay-TV distributors. Retrans revenue for the industry is projected to hit $6.3 billion this year, ballooning to $10.3 billion by 2021, according to research firm SNL Kagan.