Carriage disputes knock local stations off satellite TV platforms

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DirecTV and Dish Network, the nation’s two-largest consumer satellite television operators, have become embroiled in a carriage dispute with broadcasters of local television stations.

On Dish, a carriage dispute involving Morgan Murphy Media has disrupted programming for customers in two states: Wisconsin and Washington. Affected stations include CBS affiliate WISC-TV (Channel 3, Madison) and ABC affiliate KXLY (Channel 4, Spokane) among others.

On DirecTV, an ongoing dispute with CBS affiliate KFMB-TV (Channel 8) caused the station to be blacked out Thursday hours before the start of a pre-season NFL football game between the hometown San Diego Chargers and the Dallas Cowboys.

KFMB is owned by San Diego-based Midwest Television, Inc. and is the sole television property of the company.

Under federal law, pay television platforms must carry a local broadcast station serving a community. However, a broadcaster can waive this rule — known as “must-carry” in the industry — if they expect to be compensated by a cable or satellite company for the rights to re-distribute a channel or group of channels.

As has become typical with carriage disputes, the ongoing issues between the broadcasters and the satellite companies involve the amount of compensation DirecTV and Dish will pay Morgan Murphy and Midwest Television for the right to re-distribute local channels. Routinely, pay TV companies blame programmers for extorting higher fees in exchange for retransmission rights, with broadcasters responding by asserting their request for fees is fair considering the viewership of their channels.

The current disputes between the broadcasters and the satellite companies is no different, with stations operated by Morgan Murphy launching pages on their respective websites drawing attention to the wealth of Dish Network’s chief executive and suggesting the satellite company can afford to absorb the costs of an increased retransmission fee instead of passing it along to consumers.

“Whatever increase Dish and (Morgan Murphy) might agree to, to characterize (Morgan Murphy) as being greedy or holding viewers hostage is simply not true,” read a statement on the KXLY website. “Its chairman is the 43rd richest man in the world and answers to shareholders first — it is entirely up to Dish what, if any, increase they pass through to you.”

In a statement posted online, KFMB criticized DirecTV’s large corporate stance by drawing attention to its own community roots.

“(KFMB) and our 200 employees have deep roots in San Diego,” the statement attributed to the station’s general manager said. “Unfortunately, we are now dealing with one of the world’s largest companies in New York City; AT&T/DirecTV clearly does not understand or appreciate the unique local programming, content and community outreach offered by (KFMB).”

DirecTV was purchased by AT&T last month for $49 billion. The deal made AT&T, which already operated U-Verse TV, the largest pay television company in the United States.

Both KFMB and Morgan Murphy say they are continuing negotiations. As is common in carriage disputes, it is expected all sides will reach an agreement within the next few days or weeks, and the terms of those agreements will likely remain undisclosed.