Cable Rivals Partner to Battle Blackouts
Cable companies and content providers have repeatedly battled over fees, with channels getting temporarily yanked from the air during negotiations.
Today 31 video distributors are partnering to form the "American Television Alliance,"to address the rules governing broadcast signals and the threat of blackouts.
The group says it aims to "protect consumers in today's changing TV environment" — to keep their favorite shows from being collateral damage of negotiations, as when Disney pulled ABC off Cablevision's air right before the Oscars.
Cable, satellite and telecom companies want the FCC to mandate that content providers leave channels on the air when negotiations are ongoing. With networks increasingly demanding retransmission fees for broadcast networks, and not just cable channels, these negotiations are increasingly heated.
This new organization is led by Time Warner Cable, joined by other cable companies like Cablevision satellite TV players Direct TV and Dish Network, as well as AT&T and Verizon.
Notably absent is Comcast, because of its pending mergerwith NBC Universal — a merger of content and distribution that raised questions about how NBC would handle retransmission negotiations with rival cable companies.
Today Rainbow Media and parent Cablevision are threatening to pull their AMC, IFC and WE TV channels from AT&T U-Verse customers. AT&T issued a statementsaying "It's unfortunate that Rainbow Media, owned by Cablevision, is clearly not negotiating in good faith, is trying to charge significantly more than the average of what our TV competitors pay for these channels, and is acting in a way that harms competition and limits consumer choice."
In August a major deal is up for renewal: Time Warner Cable and Disney's contract expiring. The two companies have already been in talks for months, but if ATA's PR campaign is any indication, they still haven't reached a deal.
A senior executive at one of ATA's partner companies speaking on background tells me that the alliance of such disparate parties speaks to the gravity of the problem. These companies are archrivals, competing for customers. They don't agree on a whole lot else — but they do agree that the system for negotiating fees. Content distributors see that programmers have a far stronger trump card in their ability to remove programming now than ever.
Times have changed since the FCC's rules were written in 1992: carriage is universal and competition is real.
UPDATE: Rainbow Media this afternoon issued a response to AT&T's statement. Here's an excerpt: “Our executives have been at AT&T U-Verse offices for several weeks, doing everything possible to reach an agreement.....We are disappointed that AT&T is publicly threatening to take away our networks, including AMC’s “Mad Men”, just days before the season premiere.”
Questions? Comments? MediaMoney@cnbc.com