AT&T Communications CEO John Donovan will retire as head of the phone company’s mobile, pay-TV and broadband unit on Oct. 1. AT&T said a replacement would be named “soon.”

“JD is a terrific leader and a tech visionary who helped drive AT&T’s leadership in connecting customers, from our 5G, fiber and FirstNet buildouts, to new products and platforms, to setting the global standard for software-defined networks,” said AT&T chairman and CEO Randall Stephenson in a press release. “He led the way in encouraging his team to continuously innovate and develop their skill sets for the future. We greatly appreciate his many contributions to our company’s success and his untiring dedication to serving customers and making our communities better. JD is a good friend, and I wish him and his family all the best in the years ahead.”

Donovan’s 11-year career with AT&T began in 2008 when he was named chief technology officer and was later promoted to chief strategy officer and group president of AT&T Technology and Operations. In July 2017 he was tapped to head the Communications unit, which serves more than 100 million mobile, broadband and pay-TV customers. On the pay-TV side, AT&T Communications includes its DirecTV satellite TV unit, Uverse, the DirecTV Now streaming video service and another streaming video offering -- AT&T TV -- that was launched in a few test markets earlier this month and should see a wider release in the fall. At the Credit Suisse conference in June, Donovan touted the new streaming product as a radical reshaping of the TV concept. 

“It’s been my honor to lead AT&T Communications during a period of unprecedented innovation and investment in new technology that is revolutionizing how people connect with their worlds,” Donovan said in a press release. “All that we’ve accomplished is a credit to the talented women and men of AT&T, and their passion for serving our customers. I’m looking forward to the future – spending more time with my family and watching with pride as the AT&T team continues to set the pace for the industry.”

CBS stations in 14 markets went dark to AT&T Uverse, DirecTV and DirecTV Now customers at 11 p.m. Pacific Time (2 a.m. Eastern) Saturday, after both sides failed to reach a retransmission consent deal.

CBS began warning customers it may go dark on July 16. On Saturday it made good on that promise, with stations in New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Boston, Atlanta, Tampa, Seattle, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore going dark to DirecTV, Uverse and DirecTV Now customers. In addition, 117 CBS stations and affiliates were dropped on DirecTV Now, CBS Sports Network was removed from DirecTV and DirecTV Now and the Smithsonian Channel was removed from DirecTV.

“After months of negotiations, CBS is simply looking to receive fair value for its popular programming and is proposing economic terms similar to those that AT&T’s competitors have accepted in hundreds of our recent distribution agreements,” CBS said in a press release. “The DirecTV deal expiring tonight was signed in 2012 and is nowhere close to today’s fair market terms for CBS content – to which AT&T's competitors have repeatedly agreed.”

CBS said it had granted AT&T an extension earlier this month to continue to work out a deal, but its offer of a 30-day extension was rejected.

AT&T said it has been working to hammer out an agreement for months as well. On Friday it said it offered CBS a rate that was higher than any it has ever paid to a broadcaster, but was turned down. The company said that customers could access CBS programming over the air, via web app Locast or through a device called the Local Channel Connector. AT&T had attempted to gain permission to sell CBS All Access, the broadcaster’s streaming service, to customers but was rejected. Customers can still purchase CBS All Access on their own.

“We were willing to continue to negotiate and also offered to pay CBS an unprecedented rate increase,” AT&T said in a press release. “That increase would present CBS the highest fee we currently pay to any major broadcast network group, despite the fact that CBS stations are available free over the air.”

“We had hoped to avoid any unnecessary interruption to any CBS-owned stations or national channels that some of our customers care about,” AT&T continued. “But CBS refused.”

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Now the only question that remains is how long the blackout will last -- the college football and NFL seasons start in September, which could add pressure to the negotiations. And in the back of every distributor’s mind in the month-long blackout between CBS and Time Warner Cable (now Charter Communications) in 2013 that resulted in record video subscriber losses for the operator. 

AT&T already is fighting retrans battles with Nexstar Media Group (126 stations) and a group of 17 smaller stations in 14 markets. This blackout pushes the number of stations dark to AT&T video customers to 162.

But this time is different. Locast, the non-profit local broadcast app that provides free access to over-the-air broadcasters in about 13 markets, including seven of the affected CBS broadcast locations. The Locast app has been available on Uverse and DirecTV set-tops since May 30. Then there is Local Channel Connector, a device that puts local broadcasts into the program guides of DirecTV customers with Genie set-tops. 

“Make no mistake. We want the CBS owned-and-operated local broadcast stations in our lineup,” AT&T said in its press release. “Yet customers today are demanding more choice and value from their local stations. Instead, it has become clear to us that CBS is intent on blacking out any home that chooses to receive cable or satellite service, antagonizing its most loyal viewers.”

AT&T may be on the road to a third broadcaster blackout in the next few days, after CBS said in a statement that while it is working hard to reach a retransmission consent agreement with AT&T Uverse, DirecTV and DirecTV Now, the carrier “continues to propose unfair terms.”

AT&T’s deal with CBS expires at 11 p.m. (Pacific Time) on July 19 and would affect its owned and operated stations in New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Boston, Atlanta, Tampa, Seattle, Detroit, Minneapolis, Miami, Denver, Sacramento, Pittsburgh and Baltimore. Three of those markets -- Atlanta, Seattle and Johnstown-Altoona, Pennsylvania are CW affiliates). Already the carrier is weathering blackouts with Nexstar Media Group and a group of about 17 stations in 14 markets. AT&T also sued Max Retrans, a consultant for several TV stations in retransmission negotiations, earlier this month for breaching non-disclosure agreements. 

CBS said it is “negotiating resolutely and in good faith with DirecTV, DirecTV Now and AT&T U-verse TV to reach a fair market value agreement for its programming,” and that it has reached hundreds of similar deals with cable, satellite and telco distributors. “AT&T, however, continues to propose unfair terms well below those agreed to by its competitors and may drop CBS unless we agree to those terms.”

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In a statement, AT&T said it was disappointed that CBS has decided to negotiate in public

“We’re disappointed to see CBS put our customers into the middle of negotiations,” AT&T said in a statement. “AT&T is on the side of customer choice and value and wants to keep the local CBS stations in 14 affected cities in our customers’ lineups. Our goal is always to deliver the content our customers want at a value that also makes sense to them. We continue to fight hard for that here and appreciate our customers’ patience while we work this out with CBS.” 

AT&T and Nexstar Media Group officials are expected to meet on Friday July 12 at DirecTV headquarters in El Segundo, Calif., the first time they will meet face-to-face since the broadcaster’s 120 television stations went dark to DirecTV, DirecTV Now and Uverse customers on July 3.

Nexstar stations in 97 markets went dark at 11:59 p.m (Mountain Time) on July 3 after the parties reached a stalemate in their retransmission consent negotiations. Since then several federal legislators have chimed in on the dispute, urging AT&T to accept what Nexstar has called its offer of an unconditional extension that would keep the channels on the air as negotiations continued.

In a statement, AT&T disputed Nexstar’s characterization of the extension, claiming it was rife with conditions, the most pressing being that the distributor would have to agree to its rates being retroactively applied.

“We have spent the past week offering Nexstar new rates in multiple good faith proposals. Nexstar claims that it offered us an unconditional 30-day extension. That is not true. Nexstar’s extension was specifically conditioned on its rates being retroactively applied, with an expectation that we and our customers would pay its unprecedented proposed fee increase,” AT&T said in its statement.

AT&T hinted in its statement that Nexstar also is demanding that the deal cover properties it doesn't own yet -- namely the stations it will acquire as part of its $6.4 billion purchase of Tribune Media, adding that the broadcaster is issuing ultimatums “for local stations and a low-rated cable channel it does not own.” Nexstar agreed to purchase Tribune -- which owns 42 stations and cable channel WGN America -- in December. 

But like most retrans disputes, money is at the heart of the impasse. AT&T claims that that Nexstar is demanding a doubling of its current retrans rates -- the largest increase DirecTV has ever been presented in retrans talks, the company claims -- while its audience has dropped by about half.

“Under this cloud, Nexstar has slow-rolled any talks, made immaterial concessions against these unprecedented demands, and only offered to meet for the first time when it suited Nexstar leadership best – this Friday – or nine days after removing its stations,” AT&T said in the statement.

Whether the two will be able to hammer out a deal this Friday is anyone’s guess. Nexstar claims that over the past 20 months it has reached 390 retrans deals for its stations with cable operators. The broadcaster says it has continued to negotiate in good faith with AT&T and has offered it the same rates it has offered other large distributors. 

But even if AT&T were to accept the 30-day extension, it would end on Aug. 8, about three weeks before the start of the college football season on Aug. 31 and about a month before the NFL regular season starts, which would give the broadcaster even more leverage in a blackout if a deal wasn't reached during the extension period. 

The impasse also comes during the height of the hurricane season, and AT&T said today that it is launching a dedicated emergency weather information channel similar to ones it has launched in the past, enabling homes in the Gulf region of the country access to up to date emergency weather information. 

Toddler-targeted BabyFirst network has reached a carriage agreement with AT&T U-verse, the two parties announced Friday.

BabyFirst, which offers educational content targeted to Latino families, will launch on the telco's Paquete Español package, said network executives. An English-language version of the BabyFirst service is already on U-verse's lineup on channel 310.

"With every third baby born in the U.S. being Latino, there is an increasing recognition among programming distributors that this community is hungry for age-appropriate content for their kids," said Sharon Rechter, EVP Business Development and Distribution, BabyFirst. "We have enjoyed a great relationship with AT&T U-verse through its carriage of our English-language channel, and we look forward to now working with them to provide their Latino customers with the same high quality, engaging programming experiences."   

Added Julie Tran, head of foreign language programming, AT&T U-verse: "We are pleased to offer this unique service as part of our Paquete Español package – which further enhances our extensive lineup of channels aimed at diverse communities.”