Sinclair TV off, on Dish in clash

A dispute between Sinclair Broadcast Group Inc. and Dish Network Corp. left about 5 million satellite-TV customers without some local channels this week.

Sinclair blocked Dish customers' access to 129 stations in 79 markets Tuesday, Dish said in a statement. It asked regulators to intervene in what it called the largest blackout in television history, affecting viewers in 36 states.

A news release Wednesday afternoon said Dish and Sinclair had agreed to a short-term contract extension that would restore Sinclair channel broadcasts to Dish Network subscribers.

Sinclair station KATV, Channel 7, in Little Rock went dark on the Dish network Tuesday, a subscriber said. A spokesman for the ABC affiliate said Wednesday that the station was not commenting on the dispute.

Within hours of the blackout, Federal Communications Commission Chairman Tom Wheeler said the agency's staff would call an emergency meeting with the companies to "bring back local programming."

"We will not stand idly by while millions of consumers in 79 markets across the country are being denied access to local programming," Wheeler said in a statement Wednesday.

Tensions have grown as broadcasters demand higher rates from cable- and satellite-TV providers. Disputes have triggered 145 blackouts so far in 2015, compared with 107 last year and 127 in 2013, according to the American Television Alliance, an advocacy group with members including Dish.

"The timing of the dispute is not ideal for broadcasters," Kannan Venkateshwar, an analyst with Barclays PLC, said in a note Wednesday. The FCC "may choose to have a more hands-on approach to this dispute given its recent focus on this area."

The dispute involved access by more than 5 million Dish subscribers to Sinclair stations affiliated with networks including CBS Corp., Walt Disney Co.'s ABC, 21st Century Fox Inc. and Comcast Corp.'s NBC, according Venkateshwar.

Sinclair demanded an agreement for "an unrelated cable channel that it hopes to acquire," Warren Schlichting, Dish senior vice president of programming, said in the company's statement. The companies had already agreed on rates for TV-station signals, he said.

Dish in a filing with the FCC said Sinclair unfairly coordinated negotiations for stations the broadcaster doesn't own. Some Sinclair stations program and help to run unrelated nearby stations. Dish asked the agency to prohibit Sinclair from coordinating negotiations for stations it doesn't own.

Sinclair General Counsel Barry Faber said Dish "is simply trying to spin the facts in an apparent effort to make a political statement."

"This is simply a commercial business transaction in which the parties unfortunately were not able to agree on terms," Faber said in an emailed statement. "Fortunately, the public has ways to receive our stations other than from Dish, including for free over the air."

The FCC is examining how to determine whether parties in disputes are negotiating in good faith, Wheeler said in an Aug. 12 blog post.

Those comments suggest the FCC may be looking for ways to put pressure on both parties to minimize blackouts and may ask whether channel bundling is an acceptable negotiating tactic, Paul Gallant, a Washington-based analyst with Guggenheim Securities, said in an Aug. 13 note. Broadcasters get their pricing leverage in part from the FCC's hands-off approach toward negotiations, he said.

The last disagreement on this scale pitted CBS against Time Warner Cable Inc. in 2013, Barclays' Venkateshwar said in a note Wednesday. That blackout affected more than 3 million subscribers in cities including New York, Los Angeles and Dallas. Time Warner Cable lost more than 500,000 subscribers, and Dish could lose customers amid the current dispute, Venkateshwar said.

Broadcast and pay-TV advocates offered opposing views of the dispute.

"If this mushroom cloud doesn't compel Congress and the FCC to fix this unfair system, what will?" said Trent Duffy, a spokesman for the American Television Alliance, the group listing members including Dish, DirecTV and cable providers that calls TV blackouts "a menace."

Robert Kenny, a spokesman for TVfreedom, a group that represents broadcasters, said, "The TV blackout strategy executed by Dish is deliberately timed to create hysteria and persuade the FCC to alter rules to give them a regulatory advantage."

Business on 08/27/2015

Upcoming Events