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AT&T Accused of Using Retrans Feud to Drive Users to DirecTV

Between March 15 and yesterday, AT&T television customers in 23 states were been unable to view Raycom Media content. The freshly-resolved blackout is the latest in what feels like an endless number of retransmission feuds where customers lose access to content they're paying for, never see refunds, and are used as PR pinatas as broadcasters and cable providers fail to strike new contracts like reasonable adults. These feuds usually end with the two sides striking confidential deals, after which consumers just wind up paying more money than ever for the same exact programming.

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This Raycom feud was slightly different, in that the broadcaster accused AT&T of intentionally being difficult in negotiations in order to drive U-verse TV customers to DirecTV.

"AT&T U-Verse, now combined with DirecTV, appears to be using programming disruptions as an opportunity to switch AT&T U-Verse customers to its DirecTV service," Raycom said in a statement. "When disgruntled AT&T U-Verse subscribers call to lodge a complaint, they are offered a subscription with DirecTV, the very same company as AT&T. In some instances, subscribers are also pushed to DirecTV Now, a service that in many markets does not carry any local broadcast affiliates."

AT&T has been intentionally trying to drive new TV customers to AT&T-owned DirecTV since last year. Existing U-Verse TV customers still get service, but it's pretty clear that AT&T will eventually begin nudging those users toward DirecTV as well to free up fixed-line bandwidth used for broadband service.

But, as you might expect, AT&T disagrees with Raycom that it's using carriage and retrans fee disputes to expedite that process.

"Raycom Media determines whether or not its stations remain in our U-verse customers’ lineups," said AT&T in its own statement provided to DSLReports.com.

"We have asked Raycom numerous times to leave their stations up, and once they took them down, to put them back up," the company added. "We have offered to compensate Raycom--even when out of contract--for events like the NCAA Division I Men’s Basketball Tournament where a program of key interest is at risk. Our challenge to Raycom stands--put your local stations back on and we will compensate you while we work privately to settle this issue. It’s also important for our customers to know that--other than Raycom--we have no other blackouts across the 21 states U-verse serves."

Interested users may also want to check out this ongoing thread on the subject in our AT&T forums.
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nfotiu
join:2009-01-25

1 recommendation

nfotiu

Member

What's the problem?

It's a strange accusation. I don't seeo the problem of sending them to their other services that have the channels.

The simple way to end all of these disputes would be to outlaw the practice of the content owners having say in how the cable companies sell their channels. There should be a price per customer for the content, and the cable companies should be able to bundle those or not bundle those however they choose.
desarollo
join:2011-10-01
Monroe, MI

4 recommendations

desarollo

Member

Re: What's the problem?

The customer should have the choice in what channels they receive, not bundles.

As for the locals, they shouldn't be able to charge what they spend epic amounts of money to throw into the air for free.
nfotiu
join:2009-01-25

nfotiu

Member

Re: What's the problem?

There's enough competition out there now in terms of providers. Most people have telco, cable, 2 sat dish, and 3 OOT providers to choose from. If they all had the ability to package the channels however they saw fit, some of a la carte would materialize.

Locals could charge whatever they want but they shouldn't be able to demand that they are carried on the base bundle.
elefante72
join:2010-12-03
East Amherst, NY

3 recommendations

elefante72

Member

Re: What's the problem?

This is the problem. There is competition for cable channels but broadcast channels MUST carry the local stations, and as we all know that outside of EPSN and RSN broadcast is the largest bump in the bill.

How do you negotiate with a government-mandated monopoly with no government insight into cost? In secret, and well you keep raising the price.

So I as a consumer should be able to choose Yuma, AZ ABC station if it costs $1 versus the who knows how much my local station charges. I could care less about local content, and so do many people.

Yet another law that is a holdover from the stone ages.

techfury90
join:2015-03-03
Carrboro, NC

techfury90

Member

Re: What's the problem?

I wish they'd stop negotiating. It'd be nice if the FCC just set a fixed, uniform, per-subscriber retrans fee and shoved it down the greedy broadcasters' throats. The MSOs would be so happy too.

Anon234a2
@2602:100.x

-1 recommendation

Anon234a2 to desarollo

Anon

to desarollo
said by desarollo:

The customer should have the choice in what channels they receive, not bundles.

Not going to happen. If it did expect the cost of such channels to be 3X-5X the cost of what they are now. You're not getting channels for $1 each. Want the most popular ones? Expect to pay $5 or more per channel
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

-1 recommendation

rbeyer229

Member

Re: What's the problem?

Yep. That's the truth. A la carte is a pipe dream. People don't really want A la carte - they want a lower TV bill. They're just too foolish to realize they would be paying as much, if not even MORE, were some sort of "A la carte" system to ever materialize. It's largely psychological - and these same people would scream at the notion of paying $75 for their favorite 8-10 channels when "before" they got "120 channels" for the same price.
desarollo
join:2011-10-01
Monroe, MI

6 recommendations

desarollo

Member

Re: What's the problem?

Your argument is specious. What people want is programming they enjoy, and they'll endure a cost basis that fits their tastes, whether it be commercial load or subscription.

Bundling and force carriage only causes the channel owners to strive for the lowest common denominator. Remove their monthly stipend, and they'll be forced to actually produce quality content (or at least content people want to see) and they'll die.
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

-1 recommendation

rbeyer229

Member

Re: What's the problem?

My point is that they aren't going to take less for their product. You can pick your 5 channels...that will be $75 plus taxes and fees. A rip off you say? We'll be happy to give you "120 channels" for the same $75. That's how it works.
nfotiu
join:2009-01-25

5 recommendations

nfotiu

Member

Re: What's the problem?

When people make that argument, they talk like all channels are equal. In reality 105 channels cost a few cents each and live off of advertising dollars, and 15 of the channels cost 2-8 dollars, and almost all of them are sports channels of some sort. So yeah, sports fans will have to pay more for their channels, but there is some limit to what people will willingly pay for them. Non-sports fans would fair far better without haven't to be forced to subsidize the sports channels.

I'm a pretty big sports fan, but I think it is ridiculous that so many pay over $100 a year for the ESPN channels and don't even watch it. RSNs are even worse in that regard.
BiggA
Premium Member
join:2005-11-23
Central CT

1 recommendation

BiggA to rbeyer229

Premium Member

to rbeyer229
Cost would go down because most channels are garbage and would go out of business in an a la carte market.
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

1 recommendation

rbeyer229

Member

Re: What's the problem?

No, they wouldn't. Their "cost" would simply be rolled in to the remaining channels. Again, the programmers are NOT taking less for their content. That's a pipe dream. Not going to happen. That's a very common fallacy to think we can just write off 90 channels of garbage with very limited viewership and all of a sudden we will get only the channels we want at a low price. It's just not going to happen.
InvalidError
join:2008-02-03

1 recommendation

InvalidError to BiggA

Member

to BiggA
Most of the "trash" channels are part of the same TV networks as more popular channels. Expect the cost for the popular channels to rise by about the same value as what the network might lose on their less successful ones.

Don't be surprised if TV networks price their most popular channels nearly on par with their whole network bundle, rendering the unit price irrelevant if you have so much as a passing interest in any of the network's secondary channels.
nfotiu
join:2009-01-25

nfotiu

Member

Re: What's the problem?

There's a huge division between sports channels and not sports channels right now. Sports viewers are getting their channels subsidized by the non-sports viewers. There's no question that people who don't care about sports (which is a lot of people) could save money by not paying ESPN, RSN and other carriage fees.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

1 recommendation

BiggA

Premium Member

Re: What's the problem?

Not really. Without ESPN and RSNs, cable would completely implode, as there's not much else on there. Most of the content is otherwise on the networks or premium channels that you can get in a skinny bundle. ESPN is holding the cable bundle together, along with dozens of other sports channels, even though ESPN is simultaneously in a death spiral.
BiggA

BiggA to InvalidError

Premium Member

to InvalidError
The overall pricing will go down, as a lot of the junk channels will just be GONE. I think we'll see a move back to the pre-digital cable days with dozens, not hundreds of channels.
ptb42
join:2002-09-30
USA

2 recommendations

ptb42 to rbeyer229

Member

to rbeyer229
said by rbeyer229:

A la carte is a pipe dream. People don't really want A la carte - they want a lower TV bill. They're just too foolish to realize they would be paying as much, if not even MORE, were some sort of "A la carte" system to ever materialize.

This is complete nonsense.

A true ala carte system would expose pricing to the consumer, and they would be able to make an informed decision whether a particular channel is worth the additional cost.

Currently, the broadcaster/provider isn't subject to any significant competitive pressure at all. The satellite/cable operator has no real leverage over prices, because the subscriber blames the operators for outages during disputes.

If there was full price transparency to the consumer, the broadcaster would have to compete on price and content. ESPN would no longer be able to extort an estimated $7.21 per subscriber from the satellite/cable operators:

»www.whatyoupayforsports. ··· numbers/

Yes, some of the broadcasters would try to bundle their channels, and force you to pay for all of their offerings so you can watch one or two of them. They would quickly learn that most consumers won't tolerate it and seek other options. Eventually, individual channels would be available, with a discount on bundles.

There would certainly be some disruption at the outset. And, some of the niche programmers would probably fade away because they wouldn't get enough ala carte subscribers to survive. But, the broadcaster cartels would get a rude awakening, when they discover how little value people actually assign to their programming.
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

1 recommendation

rbeyer229

Member

Re: What's the problem?

Easy solution for the programmers, and that's exactly what would happen. They would not sell you just ESPN - you'd have to take Disney and several others, just like the packages we have now. You don't realize how entrenched the programmers are. They believe their content is very valuable and that people WILL pay for it - and they're mostly right. Those who have "cut the cord" are the exception, not the rule. There's a huge swath of people who will continue to pay $200+ per month for their "Entertainment" package and think nothing of it. The OTT services are merely an attempt to get something, as opposed to nothing, from the rest (and also to get the millenial generation, of course.)

The premise you are describing just isn't going to happen.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

Re: What's the problem?

I was a naysayer once too. I though it was just a market adjustment, a "right-sizing" of sorts. I was wrong. The price of cable has gone up, while the quality content has gone down or moved to networks and HBO.

The trend is accelerating, more and more people see little or no value in cable content, and efforts to force-bundle skinny bundles not only will eventually turn those customers over to being cord cutters, but have already cut a lot of subs from ESPN and other cable networks while those subscribers still technically subscribe to pay tv.

Pay TV is shrinking, even though the number of households in the US is growing. There are millions of would-be cord cutters hidden in skinny bundles that are forced on them to get broadband, and the quality of cable content has gone down, down down, while the price has gone up, up, up, and the streaming options are becoming more, more, more.
ptb42
join:2002-09-30
USA

2 recommendations

ptb42 to rbeyer229

Member

to rbeyer229
said by rbeyer229:

They believe their content is very valuable and that people WILL pay for it - and they're mostly right.

Again, this is nonsense.

Some people will pay for it. But, it will be nowhere close to the number of people that are forced to pay for it now.

Yes, Disney will try to bundle their ESPN and children's programming together. But, when faced with the true cost of subscription, they will lose a large percentage of their customers. While people with lots of disposable income won't be sensitive to the price, many others will drop it for no other reason than they don't watch any of those channels.

Case in point: ESPN is estimated to have about 87.4M (mostly involuntary) subscribers:

»www.whatyoupayforsports. ··· numbers/

In contrast, HBO/Cinemax has about 49M domestic subscribers. Domestic growth has been flat, and most of their recent growth has been international subscribers. HBO Now is growing, but at 2M subscribers it is still a small portion of their total:

»www.fool.com/investing/2 ··· ing.aspx

HBO subscription prices are running around $15/month, depending on your distributor. I couldn't find an exact price on Frontier's lame account portal, but it's for 26 HBO and Cinemax channels, albeit many are simply duplicates shifted to a different timezone.

Disney would have to compete with this incremental subscription cost, and offer the perception that their offering is at least comparable to HBO/Cinemax if they were to charge a comparable price. And on top of that, HBO is allegedly commercial-free, although it is only free of commercial interruptions and they run commercials for other programming between shows.

Disney would find it very difficult to meet or exceed HBO/Cinemax's subscription numbers at the same price point. Ditto for the other programming cartels like Viacom. The results: the prices would come down quickly, or the cartels would see a huge shrinkage in the size of their viewing audience (with a resulting impact on ad revenue).

Or, they will offer individual channel subscriptions at a reasonable price that is small enough that viewers can rationalize paying for a channel because they believe the content is worth the incremental cost.
nfotiu
join:2009-01-25

1 recommendation

nfotiu

Member

Re: What's the problem?

Obviously, ESPN has enjoyed this period where every subscriber pays $10/month for their channel. The market eventually will correct itself though to where they will have to settle for $15-$20 from the people who actually watch the channel, and it will probably correct down from that when they see that even their audience doesn't find them worth that much.

Their on air talent is already hurting. The next place to cut will be on new league contracts which will eventually correct athletes' overpaid salaries. RSNs are in the same boat and will have just a big impact on professional leagues.

I have no issue with athletes making millions of dollars from the people who voluntarily pay to watch them. Hopefully the days are coming to an end where they make even more than that off of people who don't care about them or ever watch them.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Re: What's the problem?

It's going to take 10-20 years to unwind all those contracts, and it's going to have ripple effects through college and professional sports.
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

rbeyer229 to ptb42

Member

to ptb42
ESPN has lost a boatload of viewers to their political shenanigans more than any cord cutting. Again, I don't see the business model changing any time soon. There is a base of channels that people *expect* to receive and ESPN makes sure they are tagged along for the ride, or no dice. Without that programming, it's a lost cause for the end distributor.

I'm not entirely sure your analysis vis-a-vi HBO and Cinemax is accurate either. The demographics and target audiences are very different for those channels versus Disney Jr. for example. Your argument seems to be that HBO and Cinemax can only garner 50 million subscribers, so ESPN and cartel could never possibly exceed that, at the same price point. I'm not sure that's accurate at all. A heck of a lot more people willingly avoid paying the ransom for HBO and Cinemax, and can do so easily, because they are not "bundled" services but rather premium add-on services, and always have been. Not so much for ESPN, for example.
ptb42
join:2002-09-30
USA

ptb42

Member

Re: What's the problem?

said by rbeyer229:

A heck of a lot more people willingly avoid paying the ransom for HBO and Cinemax, and can do so easily, because they are not "bundled" services but rather premium add-on services, and always have been. Not so much for ESPN, for example.

You are undermining your own argument, and bolstering mine.

My point is exactly that if Disney/ESPN was subjected to the same subscription model as HBO/Cinemax, they would have to compete on that basis and offer enough value that subscribers would choose to pay that additional cost.

It is complete nonsense to claim that "ala carte will never work" simply because you don't think distributors will go along willingly. The distributors have no choice, and the only question is how much longer consumers will continue to tolerate the current cartel pricing and being held hostage to current subscription bundles.

As more programming is offered OTT, subscribers are dropping their traditional "bundles" and migrating to services that offer what they want, and only what they want. Sure, they get less programming overall, but it's at a lower price for the channels they actually want.

This isn't like the "big 4" networks, where the broadcasters have a large lobbying presence and franchise agreements that effectively grant exclusive rights to an audience. But, even that monopoly is destined for extinction, as their programming becomes available on services like Netflix and Amazon Video. The time-delay doesn't matter, as viewers are no longer beholden to a weekly schedule and are binge-watching series on their own time.

We still have a traditional cable bundle subscription, but we are finding that we wait until 2-3 shows are recorded and then watch them all at once, skipping commercials. I think it's a matter of time until we drop broadcast TV altogether.
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

rbeyer229

Member

Re: What's the problem?

Consumer behavior is the biggest factor. You can't teach an old dog new tricks. Now it is true that the millenials are not ingrained in this behavior and mindset - but they're also the most price-sensitive and quickest to bolt. Fortunately for the big cartel, they represent the minority, not the majority. Will the tide eventually turn? Sure...eventually.

Your premise is that they will have to "compete" (the programmers) and I'm not sure where you get that. There is a healthy market of people bending over and willing to pay pretty much whatever the ransom is to get their TV and the channels they want. In fact, they will even forego other luxuries to pay the TV bill. This has been proven time and time again. There is no reason for the programming cartel to compete when so many folks will pay whatever they ask. That's the point I'm trying to make.

If you want evidence of this, just take a look at what happens when (for example) a provider loses the Viacom channels. Just saying...
ptb42
join:2002-09-30
USA

1 recommendation

ptb42

Member

Re: What's the problem?

said by rbeyer229:

If you want evidence of this, just take a look at what happens when (for example) a provider loses the Viacom channels. Just saying...

No, that's not evidence for your assertion.

Consumers scream at the provider because they have no other recourse. Since there is no price transparency, so the consumer cannot even make an informed decision. The consumer doesn't know how much Viacom charges for their bundle of channels. Per another DSL Reports posting today, that information is a trade secret.

And even if the consumer could guess how much it might be (by dividing Viacom's programming revenue by the number of subscribers, their choices are very limited: disconnect altogether (or drop everything but the basic subscription), or switch to another provider. And, the number of providers are 3 or 4 at the most, presuming they can even erect a satellite dish. Further, the other providers are paying nearly the same price, and it's just a matter of time before they get into a similar dispute over fees.

Current consumer behavior is dictated by anti-competitive cartel behavior. And yes, some of them would continue to do the same thing if they were given the choice. But, the current subscriber numbers for HBO/Cinemax clearly demonstrates that if given a choice, the number of consumers willing to do so is MUCH less, and not enough to keep the gravy train running. That's why the cartels are so desperate to maintain the status quo.

You can try to defend the cartel subscription model. You are starting to sound like a shill for them, anyway. But, the only rationale you have offered: "the cartels won't change", or "consumers won't change".

Both assertions are complete, unmitigated BS. The cartels are starting to see their revenue impacted by their refusal to recognize the trends against them. Subscriber growth is flat or even declining. Some of it was been due to the economy, but they aren't seeing new growth post-recovery.

So, they are trying to squeeze more money out of the cable/satellite providers. But, the providers are between a rock and a hard place, because they can't pass that increase onto their subscribers without causing MORE defections, and the cycle continues.

Consumers have changed, and the rate is accelerating. Disruptive technology has spawned alternatives, and the cartels will adapt, or die.

If we listened to people like you, we would still be happy to pay only a dime per minute for "long distance" phone calls.
rbeyer229
join:2016-07-07
Prairie Du Chien, WI

rbeyer229

Member

Re: What's the problem?

Yes, I'm a cartel pimp. So much so that I hadn't subscribed to pay TV in my entire life...until a couple months ago with DTV Now. LOL.

I think we both agree in some fashion that the tide will change; the dispute seems to be how long that will take and exactly what will rise out of the rubble. I'm of the opinion that it will be the status quo, for the most part. The ever-rising package rates will begin to subside as the big carriers (such as DirecTV) begin to push everything OTT and do away with the absurd [upkeep/frontend] cost of their traditional offerings. Many many OTT services will come and go...I suspect only a couple will remain. Price-wise, I fully expect everything to be similar to today for many, many years to come otherwise. The delivery method will change (OTT vs terrestrial or "traditional" delivery) but the product will be the same overpriced, commercial-laden garbage that exists today. Your vision is that some magic unicorn is going to upend the cartel model - I just don't see it. At the end of the day, you will be spending the same money. It may well be distributed differently (perhaps amongst more service providers) but your total cost will be the same--assuming you demand to keep the same channels and package you have today. If you can live with less, perhaps you'll save a few bucks. Perhaps. Only time will tell...
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

5 recommendations

BiggA to nfotiu

Premium Member

to nfotiu
Also, retransmission consent needs to be fixed. There are 3 potential options:

1. Any OTA signal is free to carry on cable/DBS.
2. The rates for carrying OTA signals on cable/DBS are regulated, and any increase has to be approved by the FCC.
3. Broadcasters can charge whatever they want, but cable and DBS companies can substitute a neighboring market or national (LA/NY) feeds, creating competition (although still allowing the networks themselves to play games with increasing costs, since the national feeds are O&O).
ptb42
join:2002-09-30
USA

ptb42

Member

Re: What's the problem?

said by BiggA:

Also, retransmission consent needs to be fixed.

Retransmission consent was created FOR the broadcasters. Retransmission was permitted until cable companies started broadcasting original programming and collecting subscriber fees for it. OTA broadcasters decided they wanted a cut, and got Congress to force the issue.

[An aside: some niche broadcasters did benefit from the "must carry" rule in the law, as they were no longer relegated to the UHF "wilderness" on the channel selector.]

It isn't going to be changed until a competitor to the National Association of Broadcaster arises and can challenge their lobbying power. But, when members have 50,000 watt megaphones to out-shout their opponents, it's going to be difficult.

Competition among the local broadcasters is also going to be hard when they have contractual franchise agreements with the networks that grant them exclusive rights to serve viewers in their reception footprint. These agreements would have to be voided.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

Re: What's the problem?

What's weird is that we have significantly viewed channels in some markets for some networks, but not all networks in all parts of all markets.

Unfortunately, cable companies wanting to bloat their pay tv numbers with skinny bundles are just perpetuating this broken system. The broadcasters have no incentive to change unless people cut the cord and don't use OTA. If they do, the broadcasters still get the eyeballs for ads, and get to cash in on the remaining pay tv subs. I suspect that Comcast, Cox, and Verizon are hiding at least a couple million would-be cord cutters in skinny bundles in order for people to get broadband.
ptb42
join:2002-09-30
USA

ptb42

Member

Re: What's the problem?

said by BiggA:

What's weird is that we have significantly viewed channels in some markets for some networks, but not all networks in all parts of all markets.

Are you referring to OTA channels, or cable-only channels?

If it's OTA channels, I suspect it's contractual. NBC may not want to offer a "superstation" channel to an area that doesn't have OTA reception, because they want to be able sell that franchise to someone.

•••

Tomek
Premium Member
join:2002-01-30
Valley Stream, NY

1 recommendation

Tomek

Premium Member

IPTV + OTA

Easy solution would be to create STB that can use aerial for local OTA and integrate it with IPTV offering
ptb42
join:2002-09-30
USA

1 edit

ptb42

Member

Re: IPTV + OTA

said by Tomek:

Easy solution would be to create STB that can use aerial for local OTA and integrate it with IPTV offering

DISH has something like this, although it's not IPTV.

However, this doesn't account for the original reason for cable systems: terrain or logistical issues that prevent someone from receiving an acceptable signal OTA.

If a network like NBC wasn't worried about annoying their affiliates, they could start adding a clause to franchise agreements, allowing NBC to create their own "superstation" and kick back a portion of the subscription fee to the appropriate affiliate, or perhaps reduce the affiliate's franchise fee to NBC by the appropriate amount.

NBC could recoup some or all of that fee/rebate by selling the commercial time currently reserved for local origination. But, NBC would probably shoot the goose by insisting their superstation be bundled with the other channels they own.

Of course, the affiliates would scream like little girls.

Anon01c4c
@rr.com

Anon01c4c

Anon

Twisted Pair vs. Satellite vs. LTE Broadcast

...and in another year or two, they're going to be nudging everyone off the satellites and on to their spiffy new 5G/LTE Broadcast network ready for 4k. Time marches on...
njt462
join:2006-11-28
Troy, MO

njt462

Member

Hmmmm

I remember back in 1999 and 2000 maybe even after when I had Dish Network when one of our local stations pulled this I believe it was the FOX station in St Louis we wake up one morning to FOX Chicago here in St Louis so we still had programming until the feud was ended. When it comes to locals why can't these providers tell them to shove it and just pipe in another feed from the same network in the same time zone like they use to.