Disputes over money may leave AT&T U-verse, Dish, and DirecTV customers staring at black screens on Thursday as three major station groups collectively representing more than 150 local over the air stations threaten to drop them if their respective carriage renewal deals are not signed.

• AT&T U-verse customers would lose access to 42 Tribune Media stations in markets like Chicago, Los Angeles, San Diego, Washington, and New Orleans.
• Media General’s 71 stations would be removed from DirecTV in cities like San Francisco, Buffalo, Austin, and Columbus, Ohio.
• Tegna (formerly Gannett) is ready to pull the plug on its 51 stations on Dish Network in cities like Washington, Dallas, Houston, Atlanta, Buffalo, New Orleans, and Seattle.

Weary customers are now enduring dire warnings their favorite local stations are about to be removed, with suggestions greedy providers won’t pay a fair price for their programming. Providers counter the station owners often demand double the rate providers paid under the old contract. Providers then pass those price increases along to the same customers that also get upset when stations and networks are blocked during hardball negotiating sessions.

Customers are fed up watching different disputes play out several times a year, often resulting in the loss of programming they paid to receive.

“It’s bad enough that we are losing channels but the bill never goes down either,” noted Dish customer Allen Gayla Shaw on the satellite provider’s Facebook page.

“I’m tired of providers holding viewers hostage for your egos,” echoed Sandi Montgomery Cockroft.

More than five million Dish Network customers in 36 states can once again watch Sinclair-owned TV stations on the satellite service after the head of the Federal Communications Commission intervened to end the largest TV station blackout in U.S. history.

On Tuesday, Sinclair ordered its 129 stations to pull the plug on Dish subscribers after the satellite company failed to reach terms on extending its carriage agreement.

Dish accused Sinclair of “failing to negotiate in good faith” and noted the two companies had reached an agreement on a price to continue carrying the TV stations. What derailed the deal? Sinclair demanded Dish carry a new cable network focusing on high school and college sports it was planning to eventually launch. The TV station group owner also wanted to right to negotiate carriage contracts for another 23 stations Sinclair does not own, but operates under joint-sales agreements. Last March, the FCC prohibited such agreements but Sinclair believed its stations were grandfathered and not subject to the FCC’s ruling.

The large number of stations involved and the potential subscriber impact of dropping more than 100 stations all at once may have given Sinclair extra confidence to pull off a game of hardball. Dish lost 81,000 pay-TV customers in the second quarter of 2015, compared with a loss of 44,000 a year earlier. Dish is also no stranger to these kinds of disruptive disputes, having been involved in 32 of 74 major programming blackouts since 2013.

Earlier this month, Sinclair executives also told investors during an earnings call that the retransmission consent contracts with 75% of its distribution partners (cable, telephone and satellite companies) were up over the next year, giving Sinclair the chance to reset renewal rates higher to boost revenue.

Sinclair owned television stations (the numbers show the number of TV stations Sinclair owns and operates in a region.)

In a research note, BTIG analyst Richard Greenfield said Sinclair’s “greed” was likely to backfire on the company.

“Sinclair’s actions vis-à-vis Dish look to us like lighting a match in a dry brush field,” Greenfield wrote. “The government is looking for reasons to get more involved to help consumers. Sinclair may have finally given them a blatant enough excuse.”

Greenfield was right.

The dispute attracted the attention of FCC chairman Thomas Wheeler who requested “an emergency meeting” with the two companies yesterday to focus on the dispute. Wheeler had previously warned the FCC was taking a closer look at the growing number of station and network interruptions that anger paying customers. So far this year, there have been 145 station and network blackouts according to the American Television Alliance. Last year there were 107. In 2010, there were 12.

While most carriage disputes are about a disagreement over the fair value of a network’s programming, this high-profile battle already reached a settlement on that issue.

“At first blush, Sinclair’s actions sound crazy,” says Greenfield. He is convinced Sinclair has blatantly violated FCC rules by demanding to negotiate for stations it does not own. He also thinks demanding fees for a future cable network could run afoul of federal antitrust laws.

In this latest standoff, and under pressure from the FCC, Sinclair appears to have blinked first and programming was restored for Dish subscribers beginning late Wednesday, as an agreement between Sinclair and Dish was reached. The terms were not disclosed.

“On behalf of more than 5 million consumers nationwide, I am pleased Dish and Sinclair have agreed to end one of the largest blackouts in history and extend their negotiations,” Wheeler said before a final agreement was announced. “The FCC will remain vigilant. Use of the public airwaves is a public trust.”

Two cable industry trade associations have asked the Federal Communications Commission to start collecting more fees from satellite television operators to cover the FCC’s regulatory expenses — a move satellite providers argue will cause consumers to suffer bill shock from increased prices.

The American Cable Association and the National Cable & Telecommunications Association have filed comments with the FCC asking the commission to impose the same regulatory fees on satellite subscribers that cable companies are likely to pay in 2015 — 95 cents a year per subscriber.

The FCC has proposed initially charging satellite operators $0.12 this year per customer, or about one cent a month. The two cable lobbying groups want that 12 cent fee doubled to 24 cents and then raised an additional 24 cents each year until it reaches parity with what cable companies pay.

“The FCC is off to a good start by declaring that Dish and DirecTV should pay regulatory fees to support the work of the agency’s Media Bureau for the first time and proposing setting the initial per subscriber fee at one cent per month in 2015,” said Matthew Polka, president and CEO of the ACA. “But given the FCC proposes that cable operators pay nearly 8 cents per month, per customer, it must do more, including requiring these two multibillion dollar companies with national reach to shoulder more of the fee burden next year that is now disproportionately borne by smaller, locally based cable operators.”

The satellite industry has filed their own comments with the FCC objecting to any significant fee increases, claiming it will cause consumers to experience bill shock and that satellite companies pose less of a regulatory burden on the FCC in comparison to cable operators.

The ACA counters that even if the satellite companies were required to pay the full 95 cents this year — the same rate small independent cable operators pay — it would add a trivial $0.08 a month to customer bills — less than a 0.4% increase on the lowest priced introductory offer sold by satellite providers.

The ACA reminded the FCC it did not seem too concerned about rate shock when it imposed a 99 cent fee on IPTV providers like AT&T U-verse in 2014 without a phase-in.

DirecTV and Dish argue the FCC has jurisdiction over cable’s television, phone and Internet packages — a more complex assortment of services. Satellite providers currently only sell television service, so charging the same fee cable companies pay would be disproportionate and unfair, both claim.

Despite the sudden introduction of the IPTV fee last year, AT&T managed to use the opportunity to turn lemons into lemonade.

AT&T added a “Regulatory Video Cost Recovery Charge” on customers’ bills after the FCC assessed a 99 cent fee on IPTV services like U-verse in 2014. But AT&T charged nearly three times more than what it actually owed. U-verse customers were billed $0.24 a month/$2.88 in 2014 for “regulatory fee cost recovery.” But AT&T only paid the FCC $0.99 for each of its 5.7 million customers. It kept the remaining $1.89 for itself, amounting to $10,773,000 in excess profit.

This year the FCC expects to collect $0.95 from each U-verse subscriber, a four cent decline.

That is DISH’s CEO banging the drum beside a panoply of kangaroos. (Image courtesy: Gizmodo)

The ultra high-definition, bandwidth chewing 4K television standard has arrived and like HDTV before it, the first place most Americans will get to sample the new standard is over satellite television.

DISH Network is planning to introduce HDMI/HDCP 4K television owners to its new 4K Joey this year — a souped-up set-top box that can handle the high demands of 4K video.

DISH is using a Broadcom dual-core chipset and 7448 ARM processor that can handle the next standard in high-definition viewing.

While DISH set-top boxes will be ready for 4K, many cable and DSL broadband networks in the United States will face difficulties handling the online video demands that 4K video will place on their networks. In tests, watching an average movie required a minimum of a maxed out 10Mbps broadband connection. Live programming, particularly sports, required considerably more broadband speed to keep up. Few DSL networks will be able to sustain more than a handful of customers attempting to stream 4K video before neighborhood nodes become overwhelmed. Even the DOCSIS cable broadband standard still relies on shared bandwidth, and a few video aficionados in the neighborhood could pose significant challenges and speed slowdowns for other customers in the area.

Besides satellite, only fiber optic broadband will be ready to handle the practical requirements of streaming 4K video without significant upgrades.

DISH’s plans to stream video content over the Internet could one day also include 4K programming, but viewers are likely to run smack into usage caps and usage billing that ISPs are using to deter online video from gutting cable television revenue as well as further monetizing already highly profitable broadband.

Downloading just three 4K movies consumed 90GB and took more than a day to download, even with Comcast’s 100Mbps broadband service. In usage-capped markets, fewer than a dozen 4K movies would eat your entire monthly allowance. Each additional movie would subject Comcast customers to overlimit fees averaging around $6 per title.

Although DISH will offer a set-top box to handle 4K viewing, content producers are still waiting to see whether the public embraces the next HD standard before investing heavily in programming delivered using the new standard. DISH would only promise content from “several providers” would be forthcoming by the time the 4K Joey is released during the second quarter.

Love can be a fickle thing.

Take Comcast’s affair with J.D. Power & Associates, for example. In Comcast’s filings with regulators, it is very proud that J.D. Power cited Comcast for the most improvement of any cable operator scored by the survey firm. Comcast touted the fact it had managed to increase its TV satisfaction score by a whopping 92 points and Internet satisfaction was up a respectable 77 points. (Comcast didn’t mention the fact J.D. Power rates companies on a 1,000 point scale or that it took the cable company four years to eke out those improvements.)

Last month, J.D. Power issued its latest ranking of telecommunications companies and… well, the love is gone.

If customer alienation was an Olympic event, J.D. Power awarded tie gold medals to both Comcast and Time Warner Cable for their Kafkaesque race to the bottom.

The survey of customer satisfaction largely found only dissatisfaction everywhere in the country J.D. Power looked. While Comcast likes to cite its “customer-oopsies-gone-viral” blunders as “isolated incidents,” J.D. Power finds them epidemic nationwide.

The highest rating across television and broadband categories achieved by either cable company was ‘Meh.’ J.D. Power diplomatically scored both cable companies on a scale that started with “among the best” as simply “the rest.” Customers in the west were the most charitable, those in the south and eastern U.S. indicated they were worked to their last nerve.

“The ability to provide a high-quality experience with all wireline services is paramount as performance and reliability is the most critical driver of overall satisfaction,” said Kirk Parsons, senior director of telecommunications, in a statement.

Having competition available from a high-scoring provider also demonstrates what is possible when a company actually tries to care about customer service. In the same regions Comcast fared about as popular as hemorrhagic fever, WOW! Cable and Verizon FiOS easily took top honors. Even AT&T U-verse scored far higher than either cable company, primarily because AT&T offers very aggressive promotional packages that include a lot for a comparatively low price.

Other cable and smaller phone companies didn’t do particularly well either. Frontier and CenturyLink both earned dismal scores and Charter Cable only managed modest improvement. The two satellite television companies did fine in customer satisfaction for television service, but it was the two biggest phone companies that managed the best scores for Internet service. Among cable operators, only independents like WOW! (and to a lesser extent Cox) did well in the survey.

If J.D. Power is the arbiter of good service Comcast seems to claim it to be, the ratings company just sent a very clear message that when it comes to merging Comcast and Time Warner Cable, anything multiplied by zero is still zero.

J.D. Power ranking (Image courtesy: Reviewed.com)