- Tribune rejects DISH offer to extend
contract, including retroactive “true-up” for new rates, which
would keep local channels up for benefit of consumers while
negotiations continue
- Tribune attempts “forced bundling” to
gain negotiating leverage
DISH reported today that Tribune Broadcasting Company chose to
black out DISH customers’ access to 42 local channels in 33 markets
across 34 states and the District of Columbia, intentionally
harming and exploiting millions of innocent consumers in an effort
to raise carriage rates and gain negotiating leverage for an
unrelated cable channel with declining viewership, WGN America.
While DISH works to reach an agreement, the company is offering
“over-the-air” antennas at no cost so that customers in affected
markets can watch Tribune’s local broadcast channels for free.
“Tribune is demanding an unreasonable rate increase for channels
that are available for free over the air,” said Warren Schlichting,
DISH executive vice president of Programming. “Actions like
Tribune’s are what drive price increases and feed customer
frustration for our industry. With DISH’s free antenna, customers
will continue to receive Tribune channels for free over the air,
along with dozens of other broadcast channels not normally
available to pay-TV customers.”
FORCED BUNDLING AT ISSUE
In addition to asking for significant price increases for local
channels, Tribune is attempting to “force bundle” an unrelated and
low-performing cable channel, WGN America, with the media
conglomerate’s local broadcast stations.
“By attempting to force bundle its cable channel with its local
broadcast stations, Tribune is using local viewers as leverage to
raise rates for WGN America – a channel that is in decline,” said
Schlichting. “Tribune is seeking a significant rate increase
despite decreasing viewership and recently losing access to Cubs
baseball.”
DISH viewership data reveals that viewership on WGN America is
down on average more than 20 percent since the channel’s launch as
a cable network. Many of the shows available on WGN America are
available on other channels carried by DISH.
“Consumers shouldn’t have to pay twice for the same
programming,” said Schlichting.
DISH OFFER OF EXTENSION, TRUE-UP REJECTED
DISH was hopeful that it would come to a mutual agreement with
Tribune to renew carriage of the media conglomerate’s local
stations. In that spirit, DISH offered a short-term contract
extension to Tribune that would include a retroactive true-up when
new rates were agreed upon, and would preserve the ability of DISH
customers to access the Tribune local stations while negotiations
continued. The true-up would ensure that Tribune was made whole at
the new rates for the period of any contract extension.
“With DISH willing to grant an extension and a retroactive
true-up on rates, Tribune had nothing to lose and consumers had
everything to gain by leaving the channels up,” said Schlichting.
“Instead, Tribune chose to turn its back on its public interest
obligations and use innocent consumers as bargaining chips.”
DISH Network L.L.C. is a wholly-owned subsidiary of DISH Network
Corporation (NASDAQ:DISH).
NEED FOR RETRANSMISSION CONSENT REFORM
Aggressive attempts to tie together cable channels and local
broadcast network stations, when the market power of a local
broadcast monopoly is used as a negotiation lever, is called
“forced bundling.” Typically, forced bundling arrangements lead to
price increases out of line with market rates.
“Tribune’s attempt to engineer a forced bundling arrangement of
its cable channel and local broadcast stations is a prime example
of why Washington needs to stand up for consumers,” said R. Stanton
Dodge, DISH executive vice president and general counsel.
“Broadcasters like Tribune use their in-market monopoly power to
put overall profits ahead of the public interests they are supposed
to serve.”
“Actions like these are precisely the reason that Congress has
mandated, and the FCC has opened, a formal process to investigate
tactics like this,” said Dodge. “We also believe the FCC has the
opportunity to investigate remedies like arbitration with interim
carriage which could end broadcaster blackouts while preserving the
interests of all parties.”
The Federal Communications Commission issued a Notice of
Proposed Rulemaking on September 2, 2015. Read the NPRM here:
http://transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0902/FCC-15-109A1.pdf
Along with other pay-TV companies and public interest groups
that form the American Television Alliance (ATVA), DISH has asked
the FCC to consider these and other tactics as violating ”good
faith” negotiations.
Read ATVA’s comments on the NPRM filed with the FCC on Dec. 1,
2015 here:
http://apps.fcc.gov/ecfs/document/view?id=60001347759
RISING RETRANSMISSION RATES
Each year, the cost to carry local broadcast stations rises far
beyond the rate of inflation, leading to blackouts across the
country that affect millions of subscribers of various pay-TV
companies. According to SNL Kagan, a leading source on the media
industry, broadcast fees burdening pay-TV consumers were as low as
$215 million in 2006, soared to $4.9 billion in 2014 and are
expected to more than double to reach $10.3 billion in 2021.
DISH customers can visit DISHPromise.com for more information
and to ask the FCC and Congress to end TV blackouts.
Tribune Broadcasting Company’s action affects viewers of various
ABC, CBS, CW, Fox, NBC, MyNetwork, and independent stations in 33
markets. For a list of affected stations, visit:
https://dishnetwork.newshq.businesswire.com/document-library/tribune-broadcasting-company-stations-impacted
About DISH
DISH Network Corp. (NASDAQ:DISH), through its subsidiaries,
provides approximately 13.874 million pay-TV subscribers, as of
March 31, 2016, with the highest-quality programming and technology
with the most choices at the best value. DISH offers a high
definition line-up with more than 200 national HD channels, the
most international channels and award-winning HD and DVR
technology. DISH Network Corporation is a Fortune 200 company.
Visit www.dish.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160612005074/en/
DISH Network Corp.John Hall, 720-514-5351news@dish.com
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