DirecTV takes Fox complaints to the FCC


Satellite MVPD DirecTV has fired off a letter to the FCC Media Bureau charging that Fox Broadcasting Company is airing misleading ads that paint DirecTV as a villain in a contentious two-pronged carriage battle. The ads, says DirecTV, say that broadcast stations may disappear from the MVPD’s lineup when the current negotiation is over cable channels.

DirecTV notes that the Fox advisories imply that local Fox broadcast stations may be affected by the inability to come to terms, when in fact that retransmission deadline doesn’t kick in until the end of the year. The battle over cable channels, including a number of regional sports channels, is the one that is currently coming to a head based on a contract that expired 9/30/11.

Fox is accused of failing to negotiate in good faith over carriage of the broadcast stations.

Here, from Reuters, is the text of the letter:

Dear Mr. Lake:
I want to alert you to a disturbing development that relates to the broadcast stations owned and operated by Fox Broadcasting Company, Inc. (“Fox”). Specifically, in the midst of a dispute over cable programming, Fox is using misleading advertising informing DIRECTV customers that “soon, in some markets, you may lose your local Fox station,” even though our retransmission consent agreement does not expire for over two months. Furthermore while Fox continues to run these misleading ads, Fox has refused to provide us a separate offer for the continued carriage of its broadcast stations.
The carriage agreement between DIRECTV and a number of cable networks controlled by Fox Cable Networks, Inc. expired on September 30. Although the parties have been negotiating for months, Fox continues to demand that DIRECTV customers pay significantly more for the same channels they already receive. At present, DIRECTV is carrying this programming under an interim extension agreement. If a new deal is not reached, DIRECTV will suspend carriage of these cable channels on November 1.
Even if the Fox cable channels are no longer carried on November 1, the broadcast stations are covered under a separate agreement, which does not expire until December 31. Fox, however, is running advertisements asserting that DIRECTV viewers “soon could even lose” the Fox broadcast stations in their local markets. One such advertisement ran in the widely-circulated Los Angeles Times editions for Sunday,
October 23, a copy of which is attached hereto. In addition, Fox’s television advertisements on its local broadcast stations state that viewers could lose local channels (showing clips from Glee and NFL games) that are not subject to this agreement.
Ironically, at the same time it is airing these warnings, Fox has repeatedly refused to provide us with a separate offer for carriage of the Fox broadcast stations.
On the one hand, Fox has refused to negotiate in good faith for carriage of the broadcast stations. At the same time, it is informing DIRECTV customers that they may soon lose access to such stations, purposely conflating a potential November 1 deadline for cable programming with the additional loss of broadcast programming the delivery of which is assured through the end of the year. Fox is clearly abusing the public trust by its deliberate attempt to confuse and alarm consumers. Such conduct is certainly not what the Commission had in mind when it made Fox a steward of the nation’s airwaves entrusted to serve the public interest.
DIRECTV still hopes to arrive at a fair agreement with Fox before its subscribers are deprived of any programming. In the meantime, we have demanded that Fox immediately stop running advertisements that mislead consumers by suggesting that DIRECTV subscribers may not be able to receive Fox broadcast stations. To date, Fox has failed to do so.
Sincerely yours,
Derek Chang
Executive Vice President
Content Strategy & Development

RBR-TVBR observation: If you ask us, retransmission consent seems to be headed inexorably in one particular direction: a la carte.

Although most retransmission consent negotiations end without disruption of service, many of them are contentious and the most contentious confrontations do cause a disruption – and the disruptions almost always involve loss of some high-interest programming event.

MVPDs have been bleating for government intervention in the case of broadcast retransmission, while broadcasters are holding out for the current market-based business negotiation as the best path to fair compensation.

More and more frequently, these battles feature MVPD-only programmers v. MVPDs, and those battles seem to involve the must-have programmers bullying the distributors, while the distributors bully the smaller programmers.

The bottom line is that prices are continually pushed upward and passed on to consumers, and if it keeps happening, pretty soon consumers are going to make this a true open-market negotiation by subscribing only those channels they wish to watch of an a la carte menu that could easily gain bipartisan support in Congress.
This very real possibility needs to be kept in mind by all parties as these retransmission wars continue to crop up.