In a sign that tensions are rising over content licensing agreements, Sinclair Broadcast Group has pulled its signal from Dish Network; a TV blackout that the American Television Alliance is calling the largest in American history.
As of late yesterday, Dish Network LLC (Nasdaq: DISH) subscribers lost access to 129 Sinclair stations in 79 markets across 36 states and the District of Columbia. Dish tweeted the following statement to multiple customers filing complaints:
"We have agreed to Sinclair's rates and all terms for carriage of Sinclair's local channels, but the broadcaster has chosen to black out customers to gain negotiating leverage for an unrelated cable network it does not own. Despite our offer to extend negotiations without impacting our loyal customers, Sinclair has chosen to reject the extension and initiate the largest local channel blackout in the history of television."
The blackout follows news earlier this month that Federal Communications Commission (FCC) chairman Tom Wheeler is circulating an order that would change existing broadcast exclusivity rules. (See FCC Looks to Reform Retrans Rules.)
If passed, the order would allow pay-TV providers to import out-of-market signals in the event that a local broadcaster decides to withhold content. Such a rule would give pay-TV providers more power to negotiate with broadcasters since they would be able to replace local network affiliate content with network feeds from other geographic regions. It would also help protect consumers from blackouts like the one currently taking place as a result of the dispute between Dish and Sinclair.
According to the American Television Alliance, there have been 145 TV blackouts to date in 2015. Meanwhile, content licensing rates continue to rise, with SNL Kagan projecting that retransmission revenue for broadcasters will jump to $6.3 billion this year, and $10.3 billion by 2021.
UPDATE: FCC chairman Tom Wheeler has released the following statement on the Dish/Sinclair dispute.
- Today, I have directed the Media Bureau to convene an emergency meeting with DISH and Sinclair to get to the bottom of the dispute and bring back local programming to consumers. The parties will have until midnight to file their views.
The public interest is the Commission's responsibility. We will not stand idly by while millions of consumers in 79 markets across the country are being denied access to local programming. The Commission will always act within the scope of its authority if it emerges that improper conduct is preventing a commercial resolution of the dispute.
Just last year, Congress instructed the Commission to look closely at whether retransmission consent negotiations are being conducted in good faith. That’s why I have proposed to my fellow Commissioners a new rulemaking to determine how best to protect the public interest. The facts surrounding this dispute inform our findings in that proceeding, but we will not wait to act on behalf of consumers.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading