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Starz Files FCC Complaint Against Altice USA as Carriage Fight Heads into Week Four

Starz has asked the FCC to intervene in its carriage standoff with Altice USA, urging the commission to order the channels restored on Altice systems because the cable operator violated a rule that requires distributors give customers 30 days notice of big programming changes.

Starz has filed a petition for emergency injunctive relief with the FCC. The complaint details the back-and-forth in negotiations between Starz and Altice that began in September but didn’t heat up until late December. The 17 Starz-Encore channels went dark on Altice systems as of Jan. 1.

“To our great disappointment, and to the disappointment of Altice customers, Starz and its affiliated channels continue to remain off the air in New York,” said Chris Albrecht, president-CEO of Starz, which was acquired in 2016 by Lionsgate. “This disruption has caused high-quality programming that promotes diversity in its production, talent and content, to be taken from viewers with no notice. More than that, Altice has continued a pattern of abusive consumer practices in avoiding the inquiries and complaints of its subscribers about the deletion.”

Starz maintains that it never told Altice and its Cablevision subsidiary that serves the New York area to yank the channels that are home to such original dramas as “Outlander,” “American Gods,” and “Power.”

“Cablevision was aware of the disclosure requirements, but it wanted to avoid the inevitable outcry from deleting the popular Starz Channels and simply disregarded the Commission’s notice rule,” the complaint states.

Altice counters that Starz is seeking too big of a rate increase at a time when viewership is declining. Altice points to the fact that Starz last year launched a stand-alone streaming app that allows consumers to receive the service for $9 a month. Altice asserts that the fee increase sought by Starz would force it to charge more than the stand-alone streaming price.

“We are focused on providing the best content experience for our customers and continually evaluate which channels meet their needs and preferences relative to the cost of the programming imposed by content owners,” an Altice USA spokeswoman said. “Given that Starz is available to all consumers directly through Starz’ own over-the-top streaming service, we don’t believe it makes sense to charge all of our customers for Starz programming, particularly when their viewership is declining and the majority of our customers don’t watch Starz. We have offered and remain open to a deal with Starz to offer the content to customers who want it but they refuse.”

Starz has challenged Altice’s claim that ratings have been in decline. The entire Starz-Encore channel pack reached about 1.32 million viewers per month in 2017 in Cablevision homes, according to Nielsen, which compares to 1.55 million viewers for Showtime’s channel suite and 1.72 million for HBO.

According to the complaint, Starz reached out to Altice on Sept. 20 with a new written carriage proposal. Altice responded on Nov. 28. Starz sent back a counteroffer on Dec. 4, which was followed by a meeting Dec. 20 between John Huncke, Starz’ senior VP of affiliate distribution, and Bradley Fleisher, senior VP of programming at Altice.

The sides began to discuss the possibility of a short-term extension at that time. According to the complaint, Altice chief content officer Michael Schreiber told Starz that an extension would only happen if Starz “provided all of its programming services for free.” Starz declined.

Negotiations continued all day on Dec. 31 before the channels went dark at midnight.

Starz has blasted Altice for failing to offer rebates to customers who paid the monthly fee for Starz but are no longer receiving the channels. Altice said it has begun to offer rebates.

(Pictured: “Outlander”)

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