The DISH Network Blackout

Nearly 5 million households receiving their paid TV service from DISH Networks lost access to 129 local TV stations in 36 states operated by Sinclair Broadcast Group late yesterday in the largest single TV blackout in history.

DISH claims the companies had reached an agreement on rates and all other terms for the carriage of Sinclair’s local stations, but that Sinclair pulled its stations to gain leverage in carriage negotiations for a cable channel that Sinclair is aiming to buy. Broadcasters tying retransmission of local TV stations to higher rates for cable channels and online content rights is a trend that has fueled more blackouts.

Broadcast network blackouts on pay TV systems are at an all-time high, rising to 145 so far this year compared to 107 last year and just 12 in 2010. SNL Kagan projects that the retransmission revenue broadcasters collect for “free” TV will rise to $6.3 billion in 2015, $7.2 billion in 2016, and $10.3 billion by 2021.

The following can be attributed to Michael Calabrese, who directs the Wireless Future Project at New America’s Open Technology Institute:

“The current rash of TV channel blackouts result from a broken market that is itself a product of antiquated laws and regulatory neglect. Long ago the government gave Sinclair and other local TV stations free use of the public airwaves, a subsidy now worth billions. In exchange, Sinclair’s primary public interest obligation is to broadcast their content free over the air.

“Instead, like many broadcasters, Sinclair is holding millions of consumers hostage to its demand for higher and higher cable carriage rates that are ultimately passed along to those same consumers. The FCC needs to end these consumer blackouts by imposing a system of alternative dispute resolution that includes mediation and baseball-style arbitration if needed.”