Fuse Media has filed a complaint with the Federal Communications Commission charging that AT&T and its DirecTV unit are illegally discriminating against it in carriage negotiations and that AT&T’s behavior could drive Fuse into bankruptcy.
The complaint filed on Dec. 11 noted that AT&T's behavior has changed since it acquired Time Warner, now AT&T’s WarnerMedia division. WarnerMedia owns cable networks that compete with, and offers programming that is in some ways similar to what Fuse and its Fuse Music (FM) channels provide.
“AT&T’s conduct would also eliminate the only remaining Latino-owned and managed cable network,” Fuse said in its complaint.
In a statement Fuse said it would fight AT&T’s practices. "AT&T, the largest vertically-integrated media company, is using its immense market power to treat Fuse Media unfairly and unequally, particularly compared with networks that AT&T owns and operates,” Fuse said.
“ Fuse Media is an independent, minority-owned and led media company, and is in fact the only remaining cable network that is Latino-owned, controlled and managed. For 16 years, we have been committed to engaging, entertaining and empowering young, Latino and multicultural Americans; we will always fight relentlessly and vigorously for our audience and against discriminatory practices. Since January, Fuse has been the last English-language network carried by AT&T that serves Latinos,” Fuse said in its statement. “If AT&T truly values minority voices, then their words must match their actions, especially during a time in which our nation is undergoing a seismic social awakening. We are hopeful that AT&T will reverse course and negotiate in good faith moving forward.”
“We treat all programmers fairly, including Fuse,” an AT&T spokesman said. “They want the FCC to order us to provide programming our customers don’t want or value. We look forward to responding.”
In the complaint, Fuse charges that after being mainly non-responsive in negotiations since August, AT&T made an offer to carry Fuse, but Fuse is calling that offer a “mockery.”
Exactly when AT&T’s carriage of Fuse ends was not disclosed.
Fuse is seeking that the FCC enjoin AT&T from further program carriage discrimination and order it to carry Fuse and FM on equitable terms that do now restrict Fuse’s and FM’s ability to compete fairly. Fuse also asks for any other relief the FCC deems appropriate.
In its complaint, Fuse noted it had a similar issue with Comcast. After an FCC order regarding carriage of independent programmers expired on Sept. 1 2018, Comcast dropped Fuse, leading to Fuse declaring bankruptcy in 2019.
“Now Fuse is faced with the same existential threat, now in the hands of the other major vertically integrated distributor,” the complaint said.
After emerging from bankruptcy, Fuse management acquired control of the company from a group of private-equity firms, making it a minority-owned media company.
AT&T had carried Fuse under agreements dating back to 2006, according to the complaint. DirecTV also carried Fuse before AT&T acquired DirectTV in 2015. AT&T’s behavior changed after AT&T acquired Time Warner. Fuse was pushed onto a less-distributed tier while WarnerMedia’s Turner cable channels enjoy broad carriage, the complaint said.
With its current agreement about to end, Fuse made a presentation to AT&T in August and followed up fruitlessly until Nov. 25, when Fuse notified AT&T it would be making a complaint to the FCC.
On Dec. 1 Fuse got a counter offer from AT&T that Fuse said was “insultingly hollow.” Beside setting a low sub fee, AT&T sought other undisclosed conditions restricting how Fuse can do business.
In its first count, Fuse charges that it will be “significantly hampered in its ability to compete fairly” under the terms AT&T proposed. Its second count says Fuse will be “significantly" hampered in its ability to attract advertisers.”
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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