ATVA Wants CBS to Negotiate Carriage Deal, After Dish Blackout; Dish Cites Eroding Broadcast Value

ATVA spokesman Trent Duffy called the blackout “a new low” and an attempt by CBS to “shake down families” that already “pay too much for programming available for free, over the air.” The group of MVPDs including Dish demanded CBS restore its signal.

CBS blamed Dish, in a Tuesday statement: “DISH has dropped CBS and several other local television stations owned by CBS, in New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Atlanta, Boston, Seattle, Tampa, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore.” The CBS Sports Network, Pop and the Smithsonian Channel were also dropped, it noted. “This particular dispute is yet another example of the company punishing its subscribers instead of negotiating a fair carriage deal that reflects the current marketplace.” The FCC encourages the parties to come to an agreement so consumers aren't affected, a Media Bureau spokeswoman said.

ATVA challenged CBS’ assertion that Dish dropped the network's stations. “Contrary to what CBS would like the public to believe, cable and satellite providers cannot ‘drop’ local stations,” it said. “CBS, as the owner of its content, can restore its programming for DISH customers at any time, even while negotiations are taking place.”

Dish's Warren Schlichting, executive vice president-marketing, programming and media sales, said CBS is “blocking consumers in an effort to raise carriage rates for local channels and gain negotiating leverage for unrelated cable channels, all with declining viewership on DISH.” CBS is turning its back on public interest obligations to serve viewers, Schlichting said, saying the network is trying to tax Dish customers on programming that’s “losing viewers” and for content available directly from CBS.

CBS’ All Access a la carte streaming app “further eroded the value” of CBS content for Dish, said Schlichting, and the broadcaster is trying to “force bundle” unrelated and low-performing cable channels such as CBS Sports Network, Pop and Smithsonian Channel at a premium. Average viewership for the three channels is down more than 10 percent in the past three years, he said.

ATVA referenced what it called a long history of broadcasters “using TV blackouts as weapons to extract higher fees from consumers.” It called CBS “a repeat offender,” citing the broadcaster’s monthlong blackout of 3 million Time Warner Cable subscribers in 2013. This year’s 212 blackouts make it the worst year, ATVA said. Last year had 104, compared with 193 in 2015, 94 in 2014 and 119 in 2013. There were eight blackouts in 2010, it said.

When blackouts end, consumers get their programming back but at a higher cost, said ATVA. It cited SNL Kagan projections that over time, 60 percent of affiliates’ retransmission payments -- the fastest-growing part of programming costs -- will go to the networks rather than pay for local programming. Retrans fees had 40 percent annual increases over the past three years, it said. Also citing Kagan, Dish said broadcast fees are expected to reach $9.3 billion this year for channels available over-the-air (OTA), compared with $215 million in 2006 and $7.9 billion last year.

CBS is using its mix of local and national channels “against viewers,” taking advantage of “outdated laws” to force consumers to pay more, said the satellite service provider. Dish urged Congress to revamp laws that “favor these high fees and unnecessary blackouts,” said Jeff Blum, deputy general counsel.

Dish is offering to install, for customers who qualify, a free antenna based on available reception, so they can receive broadcast channels OTA. Switching to OTA-delivered local stations can save customers $120 a year, said Schlichting.