TDS Telecom, a Madison, Wisconsin-based mid-sized pay TV and broadband service provider, said it has restarted carriage negotiations with AMC Networks, just days after saying they would drop the programmer on June 10 because it is shifting original programming from its linear channels to its streaming service AMC Plus.

TDS Telecom is part of publicly traded Telephone & Data Systems, and provides TV, broadband and phone service to about 1.2 million customers in 32 states across the country and 280,000 cable subscribers in Texas, New Mexico, North Carolina, Colorado, Utah and Oregon (after its purchases of Crestview Cable in 2017 and Bend Broadband in 2014). The AMC Networks negotiation affects "all TDS and Bend Broadband channel lineups," the company said.

TDS has been in talks with AMC Networks since April -- its original carriage agreement was scheduled to expire on May 1. While the pay TV company was granted an extension to continue offering AMC programming while negotiations continued, around June 2 they apparently have reached a stalemate.

In a blog post June 2, TDS said it will no longer carry the channels -- AMC, BBC America, We TV (Women’s Entertainment), BBC World News, IFC, and Sundance -- as of June 10. 

“As with every contract negotiation, TDS looks for a fair and reasonable agreement. AMC launched AMC Plus, a direct to consumer streaming service last year. AMC Plus customers receive exclusive AMC content and early access to favorite ‘best of AMC’ shows and acclaimed movies,” TDS said in the blog post. “TDS does not agree with AMC’s decision to move valued content from live TV distribution to distribution exclusively on their streaming service. Asking cable subscribers to pay more while the AMC Network carves out highly valued content and delivers less to cable subscribers is not fair or reasonable.”

But on June 8, TDS Telecom’s director of external affairs and communications Kit Beyer said talks have resumed. 

“Since TDS notified its customers that it would no longer carry the AMC Network, discussions have restarted with the network,” Beyer said in an email message. “TDS will continue to fight for fair rates and terms for our customers and will strive for a reasonable outcome.” 

Whether that improves the chances that TDS Telecom will  continue to carry the  channels is unclear. In earlier stages of negotiations with the programmer, TDS Telecom appeared to be equally concerned with high prices and programming only available on AMC Plus. 

AMC Networks did not return requests for comment. 

AMC Networks launched AMC Plus in June 2020, and the service is available through partners like Comcast, AT&T/DirecTV and Dish Network, as well as via Roku, Amazon, Apple TV, YouTube TV and others. AMC said it had more than six million AMC plus subscribers at the end of 2020 and was on track to finish 2021 with 9 million streaming customers. AMC Plus is priced at about $8.99 per month.

TDS Telecom’s beef with the programmer is nothing new. Other providers have expressed disdain over networks that stream content at a price equal to or lesser than linear rates. But usually those tiffs get resolved.

Perhaps that will be the case here as well. But the idea that distributors, especially smaller ones that typically pay higher fees, are beginning to get upset that streaming offerings could cannibalize programming from linear channels that are currently paying the freight for programmers, is an issue that shouldn't be ignored. That streaming exclusive programming is becoming an increasingly popular practice among content companies could possibly pose problems in future negotiations, particularly with distributors that don't own content. 

Already MCTV, a small cable provider in Massillon, Ohio, said it would drop the AMC Networks channels on June 11. Conway, Arkansas-based operator Conway Corp. also has plans to drop the channels.

“After a thorough review of costs, viewership and availability of similar programming on our lineup AND on numerous streaming platforms, the decision was made to no longer carry AMC Networks,” MCTV said on its website. 

As a result, MCTV said the monthly rate for basic cable TV service would be reduced by $2, effective July 1. 

Conway TV, an electric, water, TV and telecom utility in Conway, Arkansas, said via Twitter on June 7  that it would drop the AMC channels on June 10. In addition, it is dropping Fusion TV on July 31. 

“We're committed to providing the community with quality TV programming at a competitive price, and these networks have increased their fees at an alarming rate that is unfair to our customers,” Conway TV said on its Twitter feed. 

Telephone & Data Systems said it has signed a non-binding letter of intent to acquire Sun Prairie Utlities, a municipal broadband operator in Wisconsin. Terms were not disclosed.

The deal, which is expected to close by the end of March, is the second in two months for TDS. In January, the telecom company closed its purchase InterLinx Communications, which provides wholesale fiber connections to businesses in in southern Utah. 

Sun Prairie Utilities is an electric service provider in Sun Prairie, Wis., and first built a fiber broadband ring to provide high-speed data service to the community in 1998. TDS has said it will invest in the network over the next two years to extend broadband service to the bulk of the area. TDS is also exploring making fiber service available to future business developments, within the city, to help foster business growth and attract more economic development projects.

“SPU has built a strong fiber broadband network and has worked hard to expand broadband capacity in Sun Prairie for its citizens,” said TDS vice president of External Affairs and Communications Drew Petersen in a statement. “We plan to expand the network to launch 1Gigabit broadband speeds, as well as phone service, and our industry leading IPTV solution, TDS TV, to residents. For businesses, we would look at providing dedicated fiber connections and our hosted VoIP phone solution, TDS managed IP Hosted.” 

TDS Telecom, a unit of Telephone and Data Systems, said it closed its previously announced purchase of BendBroadband in Oregon for $261 million. This represents TDS's second cable operations buy, having also purchased Baja Broadband, a New Mexico-based cable firm operating in Colorado, New Mexico, Texas and Utah, for $267.7 million. TDS said it will manage the acquired BendBroadband businesses, which also include The Vault, a data center operation, and Zolo Media, which manages and sells advertising on three Oregon TV stations and cable networks in the state. TDS's OneNeck It Solutions plans to integrate The Vault into its data-center portfolio.

"Our success will be fueled by a geographic region that is exploding with business growth and residential development. It's the hot spot of Central Oregon," TDS Telecom CEO David A. Wittwer said in a release. "I believe the BendBroadband businesses have significant potential to deliver increased returns over time and the team of talented employees in Bend will help us expand our cable operations and expertise in other states as well."

Previously it was reported that BendBroadband had about 36,000 video customers, 41,000 high-speed data subscribers and 22,000 digital telephony customers in Central Oregon. It had  2013 revenue of $70 million and nearly 300 employees, who have now joined TDS Telecom.

After more than 50 years as one of the top small independent cable companies in the industry, Bend Broadband has agreed to be acquired by Chicago-based telecom company Telephone and Data Systems, in a deal valued at about $261 million.

Bend, led by president and CEO Amy Tykeson, has been one of the most outspoken small cable operators in the country. Tykeson, who left a job as vice president of area marketing in New York for Home Box Office in the 1980s to return to Bend, Oregon to run the family business, has received numerous industry awards, and was named to the Cable Hall of Fame in 2013.

This is the second cable deal TDS has made in less than a year – in August it closed on the purchase of Baja Broadband, an Alamogordo, N.M.- based operator with about 71,000 video subscribers in Colorado, New Mexico, Texas and Utah, for $267.7 million.

Bend  Broadband has about 36,000 video customers, 41,000 high-speed data subscribers and 22,000 digital telephony customers in Central Oregon. It had  2013 revenue of $70 million and has about 280 employees.

The deal, expected to close in the third quarter, also includes two affiliated companies operated by Bend Broadband: Bend Broadband Vault, a Tier III data center providing colocation and managed services, and Zolo Media, a cable advertising and broadcast business.
“Bend Broadband’s strong market position and technology leadership will help us achieve significant forward momentum in our cable strategy,” said TDS Telecom CEO David Wittwer in a statement. “We will leverage Bend Broadband’s considerable expertise across our growing cable business, driving residential and commercial growth by delivering competitive broadband, video and managed services over the high-capacity network. We share BendBroadband’s vision of being a trusted partner to our customers and communities, and growing profitably through quality, service and innovation.”
RBC Capital Markets served as the exclusive M&A advisor to BendBroadband in connection with this transaction. Stoel Rives LLP, Davis Wright Tremaine LLP and Cinnamon Mueller LLC served as legal counsel to Bend Broadband. Sidley Austin LLP served as legal counsel to TDS.
“TDS is a longstanding, family-controlled company that shares our commitment to our customers, our employees and our communities. With TDS, we will keep hundreds of good jobs in Central Oregon,” said Tykeson in a statement. “I am proud of the customer-centered company we have built over 30 years, and I believe TDS is the right fit for our culture and values, and for our future. I want to reassure our customers that there will be no interruption in service, and Bend Broadband will remain a strong partner to our Central Oregon communities.”

Telephone and Data Systems provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to about 5.9 million customers across the country through its business units, U.S. Cellular, TDS Telecom, OneNeck IT Solutions and Baja Broadband.
“We are building a high-quality cable business that will deliver value over the long term. Bend Broadband’s culture of innovation and its attractive market demographics make it a strategic addition to our cable, broadband and data center portfolio,” said LeRoy Carlson, Jr., president and CEO, Telephone and Data Systems. “We are committed to investing resources in adjacent businesses like cable, where we can leverage our expertise and competencies to support profitable growth.”