AT&T: Customers Have Their Own Weapons in Retrans Disputes

AT&T, facing its third broadcast blackout in a little more than a month, is telling customers that they can access broadcast programming for free using services like Locast and devices such as the Local Channel Connector.

CBS dropped the latest retrans bomb on the distributors Tuesday, saying that while it is hopeful it can reach a deal, it is worried it may not as AT&T continues to demand “unfair terms.” AT&T has countered, saying it wants to keep the channels available, but at a rate that is fair to consumers.

CBS warned that is a deal isn’t reached by 11 p.m (PT) on July 19, its stations in more than a dozen markets will go dark to AT&T Uverse, DirecTV and DirecTV Now customers. On its website, the broadcaster urges customers to contact DirecTV and ask them to keep the channel on the air. 

Missing is the usual suggestion that customers switch to another provider, access programming over the air, or even subscribe to its streaming service CBS All Access for uninterrupted access to its shows. Maybe that’s coming after the deal expires, but until then, AT&T has a few of its own suggestions.

Perhaps frustrated by the barrage of retrans battles it is fighting -- it is currently enduring two other blackouts with Nexstar Media Group and a group of 17 stations in 14 markets -- AT&T expanded on the legalese that is typical of such disputes, telling customers they can fight back on their own.

According to AT&T, the fees that local station owners charge distributors have doubled in the past five years, while primetime audiences have fallen by about half, as per S&P Global’s Kagan unit and Nielsen. At the same time, major producers have bolted from broadcasters to create programming for multichannel services for more money and more freedom.

“The talent goes elsewhere, the audiences follow, and yet stations refuse to evolve, shutting off the same communities they are licensed to serve,” AT&T said in its statement, adding that so far this year more than 200 station blackouts have occurred, 20% more than the 165 in 2018.”

To be fair, CBS is still the most watched broadcast network in the country, with shows like Young Sheldon, NCIS, Blue Bloods and others attracting strong ratings. Its sports programming is highly watched and respected. And if the dispute lasts long enough, AT&T risks its customers losing access to college football -- the SEC Game of the Week starts on Sept. 14 -- and NFL football, which begins Sept. 8. 

While in the past pay TV customers just had to grin and bear it until a deal was reached, AT&T is telling them that there are viable alternatives. The first: a product called Local Channel Connector, which puts local signals into program guides of DirecTV customers with Genie set-top boxes. Customers can get a free Local Channel Connector by calling AT&T. In one dispute, -- an eight-month blackout of NBC affiliate KSL-TV in Salt Lake City, AT&T handed out 10,000 Local Channel Connectors. 

The second: Locast, the non-profit local broadcast app that provides free access to over-the-air broadcasters in about 13 markets. In the CBS dispute, Locast offers service in about seven of the affected CBS broadcast locations. The Locast app has been available on Uverse and DirecTV set-tops since May 30.

AT&T has been a backer of Locast -- it contributed about $500,000 to the Sports Fan Coalition, the non-profit organization that runs Locast, in June.

In its statement, AT&T stressed that it still wants to reach a retrans deal with CBS and every other station with which it has a dispute. But it isn’t going to just lie there and take it.

“Make no mistake. We want the CBS owned-and-operated and Nexstar local stations in our lineups, and their multimillion dollar misinformation campaigns are a waste of everyone’s time, patience and frayed loyalties,” AT&T said in its statement. “We are dedicated to helping our customers with new innovative ways to access this same content, including a new product called Local Channel Connector that puts local signals into program guides of our DirecTV customers with Genie receivers, or adding the new Locast app into all of our Genie and U-verse Internet-connected receivers so customers can stream their local stations. We continue to support Locast as it debuts in more cities, and the majority of homes affected by any potential CBS blackout will enjoy Locast capabilities. CBS also makes its shows available via the CBS All Access streaming service, typically with a free preview. Fans of stations affected by any CBS or Nexstar blackout can watch over the air, at the station websites, often at or other network websites, and typically using the CBS and other Big Four network mobile apps.”