DirecTV Files FCC Complaint Over Fox Ads

By David Wharton 2011-10-31 10:44:37 discussion comments
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If you're a DirecTV customer like me, you're no doubt aware of the current carriage dispute between DirecTV and the Fox cable networks. Normally cable contract disputes are something that wouldn't remotely be on the average customer's radar, except for the fact that both entities have taken their street fight public. DirecTV has been running messages informing customers that if the dispute wasn't resolved by November 1st, they'd lose access to channels such as Fox, FX, and Fox News. This would mean missing the back half of shows such as Sons of Anarchy, It's Always Sunny in Philadelphia, and American Horror Story, amongst others. Fox has countered with a string of commercials featuring folks such as Sons of Anarchy's Kurt Sutter and American Horror Story's Ryan Murphy, where the celebs implore you to contact DirecTV and tell them to "save your shows." Both sides have websites pointing the finger of blame at each other. Kurt Sutter even launched into a profanity-laced tirade against DirecTV on his blog.

And now things have gotten even uglier. Deadline reports that DirecTV executive vice president Derek Chang has taken the dispute to the FCC. In a letter to the commission, Change claims that Fox's ads have been misleading customers by suggesting that they may lose their local Fox channels after the November 1st deadline. According to his letter, these local channels are handled under an entirely different contract and don't expire until December 31st. Chang says Fox is intentionally trying to create confusion over the issue, as well as refusing to negotiate in good faith.

Without having the inside track on all the details of the negotiation, it's hard to say who is in the right here (or at least less in the wrong). One thing is for sure, however: once the deadline passes tomorrow, it's DirecTV customers who will likely be paying the price for this pissing match. You can read the full text of Chang's letter to the FCC below.

I want to alert you to a disturbing development that relates to the broadcast stations owned and operated by Fox Broadcasting Company, Inc. (“Fox”). Specifically, in the midst of a dispute over cable programming, Fox is using misleading advertising informing DIRECTV customers that “soon, in some markets, you may lose your local Fox station,” even though our retransmission consent agreement does not expire for over two months. Furthermore while Fox continues to run these misleading ads, Fox has refused to provide us a separate offer for the continued carriage of its broadcast stations.

The carriage agreement between DIRECTV and a number of cable networks controlled by Fox Cable Networks, Inc. expired on September 30. Although the parties have been negotiating for months, Fox continues to demand that DIRECTV customers pay significantly more for the same channels they already receive. At present, DIRECTV is carrying this programming under an interim extension agreement. If a new deal is not reached, DIRECTV will suspend carriage of these cable channels on November 1.

Even if the Fox cable channels are no longer carried on November 1, the broadcast stations are covered under a separate agreement, which does not expire until December 31. Fox, however, is running advertisements asserting that DIRECTV viewers “soon could even lose” the Fox broadcast stations in their local markets. One such advertisement ran in the widely-circulated Los Angeles Times editions for Sunday, October 23, a copy of which is attached hereto. In addition, Fox’s television advertisements on its local broadcast stations state that viewers could lose local channels (showing clips from Glee and NFL games) that are not subject to this agreement. Ironically, at the same time it is airing these warnings, Fox has repeatedly refused to provide us with a separate offer for carriage of the Fox broadcast stations.

On the one hand, Fox has refused to negotiate in good faith for carriage of the broadcast stations. At the same time, it is informing DIRECTV customers that they may soon lose access to such stations, purposely conflating a potential November 1 deadline for cable programming with the additional loss of broadcast programming the delivery of which is assured through the end of the year. Fox is clearly abusing the public trust by its deliberate attempt to confuse and alarm consumers. Such conduct is certainly not what the Commission had in mind when it made Fox a steward of the nation’s airwaves entrusted to serve the public interest.

DIRECTV still hopes to arrive at a fair agreement with Fox before its subscribers are deprived of any programming. In the meantime, we have demanded that Fox immediately stop running advertisements that mislead consumers by suggesting that DIRECTV subscribers may not be able to receive Fox broadcast stations. To date, Fox has failed to do so.

Sincerely yours,
Derek Chang

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