HBO experienced the first blackout in its 46-year history on Thursday after its programs were pulled from Dish Network’s satellite and streaming services. The blackout was the result of demands from HBO’s owner, AT&T, that Dish pay for a guaranteed number of subscribers for the content network. Under the terms of the proposed arrangement, Dish would have to pay HBO if it misses the mark. Dish and AT&T have blamed each other for pulling the programs.
The controversy comes five months after a judge ruled on an antitrust lawsuit between AT&T and the Department of Justice about the telecommunication giant’s acquisition of Time Warner, the media conglomerate that owns HBO. The DOJ had pressured the companies to either sell off either Time Warner-owned Turner Broadcasting or AT&T-owned DirecTV in order to prevent the merged company from having too much of a competitive advantage. Dish at the time backed the government’s suit, arguing that the acquisition would give its rival, DirecTV, an unfair upper hand.
During the trial, the Justice Department argued that the acquisition would hurt competition and raise consumers’ TV bills. AT&T argued that it needed to compete with big tech companies like Facebook and Amazon. US District Court Judge Richard Leon ultimately ruled that AT&T was legally allowed to purchase Time Warner Inc., and disagreed with the DOJ’s argument that AT&T would use its market power to damage competitors.
“Plain and simple, the merger created for AT&T immense power over consumers,” said Dish senior vice president of programming Andy LeCuyer in a statement on the outage. He further warned that AT&T has “the power to grab more money or steal away customers” and that future blackouts may occur.
“During our 40-plus years of operation, HBO has always been able to reach agreement with our valued distributors and our services have never been taken down or made unavailable to subscribers due to an inability to conclude a deal,” HBO said in its own statement. “Unfortunately, Dish is making it extremely difficult, responding to our good-faith attempts with unreasonable terms.” The company further argued that the merger has no bearing on the current dispute, claiming that Dish could have “extended the deal with terms negotiated with HBO” before the merger discussions.
Dish has requested that the dispute be settled in arbitration. About one-fifth of Dish’s 13 million customers subscribe to HBO. They will not have to pay any subscription fees during the outage. The company is also in a contract dispute with Univision, and the network has not broadcast on Dish for the past few months.
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