Tegna and Verizon Communications said they have agreed to extend their retransmission consent negotiations for a handful of stations in five markets until 6 p.m. January 4, holding out some hope that a long-term deal can be reached.

Also: Kagan: Retrans Fights Could Be Fewer in 2021

The talks involve Tegna stations in Washington, D.C. (CBS affiliate WUSA); Norfolk, Virginia (ABC affiliate WVEC); Buffalo, New York (NBC affiliate WGRZ); Harrisburg, Pennsylvania (Fox affiliate WPMT) and Hartford, Connecticut (Fox affiliate WTIC). The retrans agreements for the stations were originally set to expire at 5 p.m. on December 31. According to a Verizon spokesperson, both sides agreed to an extension to 6 p.m. January 4 and continue to negotiate.

Also: New Year Ushers End to Several Cable Networks

Those stations are among more than 60 Tegna stations in 53 markets currently embroiled in a retransmission dispute with Dish Network. The Tegna stations went dark to about 3 million Dish customers on October 6. So far, there is no sign that a deal is imminent.  ■ 

Dish Network chairman Charlie Ergen told analysts Monday that he was “disappointed” that Sinclair Broadcast Group has decided to negotiate its upcoming retrans agreement in the press, adding that there is still some hope that a deal can be reached.

On a conference call with analysts to discuss Q2 results, Ergen said talks are continuing. Sinclair said earlier this morning that it believed it was unlikely a deal could be reached.

“I’m disappointed that they put a press release out that they expect the networks to come down. I think we have until Aug. 16,” Ergen said on the conference call. “Many negotiations come down to the wire, so we’re still going to bargain in good faith.”

That was likely a nod to Federal Communications Commission requirements that all parties in retrans agreements negotiate in good faith. Ergen added that there are other ways for his customers to receive the broadcast channels, either via antennas, Locast, or streaming services like Paramount Plus and Peacock.

But many analysts had hoped that the Sinclair RSNs -- which Dish dropped in 2019  -- would be included in the retrans talks. Ergen said he sympathized with the broadcaster, adding that regarding the RSNs, Dish first negotiated for the Fox Sports RSNs when they were owned by Disney, which purchased them as part of its $71.3 billion buy of certain Fox assets in March 2019. By the time Disney sold those channels to Sinclair later in May 2019, Ergen said reaching a carriage deal for the channels became a moot point. 

Also Read: Sinclair RSNs: Focus on the Dish Deal 

“By the time Sinclair owned it  and was able to negotiate it, our customers that wanted regional sports had left,” Ergen said. “There was no way in fairness to our customers that we could tax them in a basic package, when almost nobody who wanted regional sports was left. 

“I think there are innovative ways to reinvigorate the regional sports networks, Sinclair themselves have talked about it in a direct to consumer product,” Ergen continued. “We’ll continue to work with Sinclair to the extent they want to try to work with us in a win-win situation. But if not, … my expectation and hope would be that ultimately the companies try to resolve all the issues of concern to both parties.”

Ergen was mostly talking about the broadcast channels, but he said he would be open to any deal that included the RSNs, within reason. 

“If there are some opportunities in regional sports that make sense for us and Sinclair, we’re happy to talk about anything that’s interesting and helps our customers, but we’re not interested in taxing our customers when they don't watch the channels,” Ergen said. “Our customers will understand that. We may lose some customers if the networks go down. We’ve been through this before. The impact of [losing] local channels used to be devastating, and it’s still pretty bad, but it's not the same. And there are other alternatives.”

Later, Ergen said that the dispute with Sinclair is largely due to the fees they are requesting, and not an attempt to bundle the RSN networks with broadcast channels.

“At the end of the day it’s about money, it’s about economics,” Ergen said. “That hasn’t changed in any programming negotiation that I’ve ever been involved in.”

In a press release of its own issued after the conference call, Dish said Sinclair is demanding nearly $1 billion in retrans fees for its stations, which it claims is a “massive increase,” from its previous agreement. 

“Sinclair is making these outrageous demands, turning its back on its public interest obligation and putting customers in the middle of its negotiations,” Dish TV group president Brian Neylon in a press release. “...This negotiating tactic is used to upset our customers and intimidate us into accepting outrageous contract terms — a tactic the channel owner uses frequently.”

Dish directed customers to its DISHPromise.com website for more information, adding that it still hoped a deal could still be reached. 

“There is still time to reach an agreement with Sinclair that is fair for all parties involved, especially our customers,” Neylon said. “We will continue to fight on behalf of Dish customers to keep TV bills as low as possible. Despite the fact that Sinclair has walked away from the table multiple times, we stand ready to negotiate in good faith.”

Per FCC rules, Verizon has started warning Fios customers they may lose access to Hearst Television stations at month's end.

Verizon said Hearst is demanding "unreasonably large" increases in retransmission consent fees that may force Verizon to raise rates for its customers. 

“Affordable local news is vital and customers want quality at-home entertainment, especially during a pandemic, so Verizon is surprised that Hearst Television is demanding pay increases that might keep Fios customers from watching their channels," Verizon said in a statement. "We urge Hearst Television to get serious about reaching a fair agreement and hope they will not remove their channels while negotiations continue.”

Also Read: Retrans Season Starts With a Bang

The Hearst channels at issue include WBAL Baltimore (NBC), WGAL Harrisburg (NBC), WTAE Pittsburgh (ABC), WCVB Boston (ABC) and WMUR Manchester, N.H. (ABC).

The two companies have a complex relationship, given that Verizon and Hearst are elsewhere 50/50 partners in Complex Networks, a suite of online brands.

A Verizon spokesperson also said there could be potential issues with carriage of a couple of Gray Television stations, WWBT (NBC) and WUVP (CW) Richmond, Va., based on "[Gray's] actions with other companies," they said, without elaboration.

Also Read: Comcast Says it Reaches Hearst TV Retrans Deal

A Hearst TV spokesperson declined comment.  

"Over the last ten years, Gray has signed more than 1,000 retransmission consent agreements," said a Gray TV spokesperson, who added they could count on one had --"with fingers to spare"--the number of times Gray has not reached such agreements. "So, if Verizon is serious about reaching a deal [at] today’s marketplace rates for our top-rated stations in Richmond, a deal will get done," they said.

Mediacom Communications dodged a big retrans bullet on Monday, reaching a carriage agreement with Gray Television that involved stations in more than 35 markets across the country. Terms of the deal were not disclosed. 

Mediacom is the fifth largest cable operator in the country with about 663,000 video and 1.4 million broadband customers. 

Also Read: Retrans Season Starts With a Bang

While its Mediacom pact was negotiated without a service disruption, Gray TV is locked in a separate retrans spat involving one station -- ABC-affiliate WWSB in Sarasota, Florida -- that went dark to Frontier Communications customers on Dec. 18. Gray TV has filed a complaint with the Federal Communications Commission claiming Frontier failed to negotiate in good faith, adding that it had offered to keep the station active to Frontier customers while negotiations continued. Frontier declined that offer.

With 11:59 p.m. on Dec. 31 approaching, its retrans blackout season. 

Already, Tegna has pulled 60 TV stations in 52 markets off AT&T’s DirecTV and U-verse TV platforms, and Nexstar Media Group has blacked out 164 stations in 115 markets on Dish Network. 

Perhaps not so surprisingly, David Goodfriend, founder of nonprofit local broadcast streaming service Locast, is beating the drum for his platform as a cord-cutting alternative should, say, your favorite NFL team gets blacked out on your pay TV service. 

“In places that are hit by this [type of] dispute, I would say, ‘Don't you think it's time to cut the cord altogether?” Goodfriend told the Houston Chronicle. “Forget about DirecTV. Forget about Dish. Forget about cable. It's only going to get more expensive. It's only going to be more disruptive.

“Do yourself a favor and cut the cord,” Goodfriend added. “Sign up for Locast, sign up for some streaming services and save yourself the money and the hassle. That would be my advice.”

Also Read: Locast: Everything You Need to Know About the Streaming Platform Some Are Calling ‘Aereo 2’

Locast is currently serving 1.8 million users in 25 domestic markets in which it streams local stations. The company doesn’t charge customers, but it does seek donations starting at $5 a month. (Users who don’t pay at least that are subject to an every-15-minute barrage of commercial fundraising come-ons.) With Locast currently battling the major broadcasters in federal court for the right to exist, the nonprofit is careful to contextualize Goodfriend’s comments. 

Goodfriend “isn’t taking either side of these retrans fights,” a Locast press rep told Next TV. Rather, he’s merely advocating for consumers to cut the cord. 

Also Read: Locast Opens in Indy and Scranton, Touts More Than 1.7 Million Users

“It used to be that we had a philosophy in this country that everybody was supposed to be able to get free local media in the form of broadcasting,” Goodfriend said. “And somewhere along the line, we lost that. We broke that social contract.”

Shortly after Tegna pulled the plug on about 60 TV stations in 51 markets to DirecTV and AT&T U-verse subscribers Tuesday night, the satellite giant challenged the broadcaster to return the stations immediately, pledging to pay the company retroactively at whatever rate is ultimately agreed upon.

The Tegna stations went dark to DirecTV and AT&T U-verse customers at 7 p.m. EST on Dec. 1, after a one-day extension to their existing retransmission consent agreement expired. Usually short-term extensions are a sign that talks are progressing, but in this case, that didn’t happen. AT&T has said that the rate increases Tegna has proposed are the highest it has ever seen.

In a statement, AT&T said in light of the continuing pandemic, where up-to-date local news can be critical, the stations should return to customers while the companies try to work out a deal. 

“In the midst of an ongoing pandemic, Tegna is demanding the largest rate increase we have ever seen, and intentionally blacking out its most loyal viewers,” AT&T said in a statement. “We challenge Tegna to return its local stations immediately while we finalize a new agreement and pledge to pay Tegna retroactively whatever higher rates to which we eventually agree. We share our customers’ frustration, appreciate their patience and intend to do all we can to resolve this matter soon.”

The stations include affiliates of the four major broadcasters (CBS, NBC, ABC and Fox) as well as The CW, MyNetwork TV, and independent stations. The properties  are located in cities as large as Seattle, Washington D.C. and St. Louis, and as small as Wilkes Barre, Pennsylvania and Ft. Smith, Arkansas. 

On its station websites, Tegna claims its rate increases are market-based and reflect the quality programming it provides, pointing to the “hundreds of deals” it has reached with other distributors. 

“Those providers all felt that they were able to reach a fair deal with us while continuing to offer value to their subscribers,” Tegna said on its websites. “There is no reason why this negotiation with DirecTV and AT&T U-Verse should be different.”

AT&T has said earlier that Tegna usually reaches deals with its distributors, and the few times it has had blackouts, they usually don’t last longer than a few hours or a few days.

“This is exactly why we, along with many others, have called for reform of the broken retransmission consent regime,” AT&T said in its statement.

Broadcaster Tegna gave AT&T’s DirecTV and U-verse services another day to hammer out a retransmission consent deal, extending access to its 60 TV stations across the country until Dec. 1, allowing talks to continue.

The deal was supposed to expire at 7 p.m. on Nov. 30.

The stations involved include affiliates of all four major broadcasters in cities like Seattle, Washington, D.C, Minneapolis, Denver, Dallas, New Orleans, Cleveland and St. Louis. Tegna has said that AT&T has “refused to reach a fair, market-based agreement with us,” but that talks continue. 

“We have agreed to a temporary extension to allow negotiations to continue,” Tegna said via its various station websites.  “...We promise to keep you informed as we make every effort to resolve this situation and keep our stations on the air.”

AT&T said in a statement that it was disappointed that Tegna decided to make its negotiations public. 

“We’re disappointed to see Tegna put our customers into the middle of private negotiations,” AT&T said in a statement. “We want to keep the Tegna stations in our local lineups. Yet by law, Tegna has exclusive control over which homes are allowed to receive ABC, CBS, NBC, FOX or CW in certain cities, regardless of what provider they choose. As many station owners like Tegna keep losing viewers and sponsors, they’ve resorted to blacking out popular local teams or any remaining hit shows at the worst possible time in order to extract unwarranted increases over their already high fees despite their fading popularity, leaving consumers to foot the bill.”

AT&T claimed that in most cases, Tegna reaches a deal without interruption, and when blackouts occur they last only a few hours or a few days, calling blackout threats “shameless profiteering at the public expense,” made worse by the current pandemic “when medical news is at a premium and regular folks are struggling to make ends meet.” 

On its websites, Tegna pointed to the myriad deals it has reached with other distributors.

“Our track record proves it,” Tegna said on its station sites. “Over the past few years, we reached hundreds of multi-year deals with cable and satellite companies all across the country, including Dish, Spectrum, Comcast, Frontier and many others. It has been disappointing that DirecTV, so far, has refused to reach an agreement.”

Tegna is the latest broadcaster to warn of impending retrans blackouts. On Nov. 26, Dish Network warned that 164 Nexstar Media Group stations could go dark to its subscribers on Dec. 2, unless a deal is reached. Dish accused Nexstar of demanding exorbitant rate increases, while the broadcaster countered that talks have been ongoing since July, and that Dish has rejected several reasonable offers. 

Broadcasters are hitting back hard on critics of the FCC's proposal to facilitate TV station's flexible use of their new ATSC 3.0 broadcast transmission standard to become a broadband as well as broadcast player, saying efforts to impose new regs, or exhume old ones, are cynical and unnecessary.

That came in reply comments by the National Association of Broadcasters on the FCC's Broadcast Internet proposal.

The FCC voted unanimously in June on a proposal to help promote broadcasting as a new ancillary/competitive broadband service by making it clear that legacy broadcast regulations do not apply to broadcast-delivered internet services like over-the-top video and data made possible by the ATSC 3.0 broadcast transmission standard.

Not so fast said MVPDs,

Cable operators have called on the FCC to mandate that broadcasters deliver a high-definition version of their primary channel before using spectrum for ancillary services and want the FCC to boost the fee broadcasters already pay for using extra digital spectrum for those ancillary services.

Cable operators also say that retrans regulations should apply to carriage negotiations that include ancillary "broadcast internet" services.

Separately, tech companies using the "white spaces" between TV channels have argued that any broadcast TV station signal that spills over 

NAB said the FCC was right not to apply such "heighten regulatory mandates" in its order approving the voluntary adoption of ATSC 3.0. "As with nearly every other industry under the Commission’s purview," NAB told the commission, "innovation is best unleashed when the government assists rather than hinders experimentation. It bears repeating that, unlike nearly every other spectrum-based service, broadcasters are not seeking additional spectrum to make this transition, and indeed following the broadcast incentive auction have less."

As to cable's beefs, NAB said: "Having twice failed to impose unnecessary and unwarranted burdens on broadcasters in a ham-fisted attempt to stifle competition, the cable lobby is now back for a third bite at the apple. Their arguments have not improved with repetition, and the Commission should promptly dismiss them."

It said NCTA-The Internet & Television Association's call for applying retrans regs is a "typically Pavlovian response to any regulatory issue involving broadcasting," and points to the FCC's rejection of earlier efforts to apply retrans to "broadcast internet," which is NAB's--and the FCC's--rebranding of the ATSC 3.0 "next gen TV" brand.

Of the HD mandate, NAB said the FCC previously rejected that HD signal mandate as well and says the FCC "should not entertain this effort to sneak in a backdoor HD mandate by imposing new requirements on broadcasters that eventually choose to experiment with Broadcast Internet services."

As for the ancillary service fee issue, it calls that a complex subsidy scheme from folks who "have never demonstrated any care or concern for television viewers," adding: "We urge the Commission not to hamper innovation by imposing new and unwarranted regulatory burdens."

After warnings about possible New Year's Day blackouts, Cable One and Nexstar reached a retrans agreement before the Dec. 31 midnight deadline.

"We reached an agreement prior to the deadline," a Cable One spokesperson confirmed, "so the signal stayed on."

Nexstar stations involved included ABC affiliate WATN –TV Memphis, Tenn.; NBC affiliates KSNF-TV Joplin, Mo., KFDX-TV Wichita Falls, Texas, and KTAL-TV Shreveport, La.

CBS affiliates could have a new weapon in the wars over retransmission consent: extended free trials of the parent network’s CBS All Access over-the-top service.

The online alternative could give them a leg up in negotiations while helping the mothership drive awareness of the online product to a motivated customer base.

The first unofficial test of the concept appears to be in San Diego, where CBS affiliate KFMB — owned by independent Midwest Television — has been locked in an ongoing retrans battle with DirecTV. KFMB went dark to DirecTV customers in San Diego on Aug. 13 after the two parties could not reach a new agreement.

The dispute is primarily over pricing — DirecTV said the station wants to double its rates, while KFMB counters it only wants fair compensation — and both sides say they are continuing to talk to hammer out a deal.

But in the meantime, KFMB is offering San Diego residents a two-month free trial of CBS All Access — the typical free period for new customers is one week — to help them through the blackout period. While KFMB vice president and general manager Pat Nevin said the promotion is not limited to DirecTV subscribers, the idea for the promotion stemmed from the retrans spat.

A ‘COMPETITIVE ADVANTAGE’

Nevin said response to the CBS All Access promotion has been good. Because of the terrain in the area, over-the-air reception is poor, he noted, which makes receiving the No.1-rated station’s signal via an antenna difficult. Other distributors in the market, including Cox Communications, AT&T U-verse TV and Time Warner Cable, have existing retrans agreements with the station.

“I think it’s a competitive advantage,” Nevin said. “We want our news production and Judge Judy and CBS primetime in our viewers’ hands. The response has been very positive, and it’s another nice thing to offer our viewers — to say, ‘If an antenna doesn’t work, check out All Access.’ It really does help soften the blow of the loss of programming to our viewers.”

CBS has been one of the industry’s biggest recipients of retransmission-consent fees. The broadcaster estimates it will reap about $1 billion in retrans and reverse-compensation fees from distributors and affiliates by the end of 2016, doubling that take to $2 billion by 2020.

And at least for now, CBS appears to be in a unique position relative to broadcast OTT services. To date, it is the only broadcaster to make its network and local programming available over-the-top.

CBS Interactive, which oversees the All Access service, declined to comment. But people familiar with the company’s thinking said it saw the San Diego situation as a marketing opportunity for the fledgling service. And though CBS Interactive isn’t actively seeking out additional retrans-negotiating stations, it will extend promotions to affiliates that ask for it in exchange for stepped-up marketing efforts.

The All Access service has previously extended promotional periods in specific areas and via specific offerings. For example, it had a one-month free trial for Roku customers when it launched service with that product, and it extended the free trial period around specific holiday retail events like “Black Friday” and “Cyber Monday.”

“It essentially gives them more skin in the game,” said one person familiar with the company’s thinking.

CBS has said all along that it did not launch All Access as a replacement or competitor to cable, telco TV or satellite service, but rather as a complement. So far, at least one cable operator has agreed to distribute the OTT offering. Last month, Cablevision Systems, as part of its overall carriage agreement with CBS, agreed to offer All Access to its broadband customers. Launch dates and pricing are expected to be announced soon.

While one broadcaster’s OTT offering won’t replace traditional pay TV service, carriage fights with broadcasters certainly can help enhance awareness of the product, as well as lessen the impact of lost viewers to the network. And CBS has gained considerably more clout as it has signed on more local stations.

CBS launched CBS All Access in October 2014 with network primetime shows, local content from its 16 owned-and-operated stations, and library content with 6,500 episodes of shows ranging from classics like I Love Lucy to more current programs like The Good Wife for $5.99 per month. A flurry of recent deals has expanded the local scope of the service to more than 125 markets, or about 85% of the country. The “live local” capability, which allows customers to stream local news and other shows as they are broadcast, is currently available in 59 markets and counting.

KFMB cut an affiliate deal with CBS All Access in June, so its news and other local programming is available to the streaming service’s subscribers.

NFL STILL SHUT OUT

While CBS All Access offers subscribers in the market unfettered access to primetime hit shows like The Big Bang Theory, it lacks a key piece of fall programming: National Football League games. DirecTV customers have already missed three preseason San Diego Chargers games in the market, and though the regular season begins on Sept. 10, local fans won’t feel the full impact of the blackout until later in the month. The first Chargers game isn’t on CBS until Sept. 20, and hopefully a deal can be reached before then.

“The Chargers are a big draw here and the fact that we missed three Chargers games; that hurts,” Nevin said. “We’re the local rightsholders for those preseason games — we produce the games, we hire the talent, we hire the truck, we hire the production crew, we pay a rights fee, and DirecTV customers overindex on football viewership. That’s a loss; there is no question about it, and one that we are looking at very closely.”