When AT & T announced plans to acquire HBO's parent company, Time Warner, competitors, consumer groups and the Department of Justice argued that the merged entity would affect competition. Now these critics say that their concerns are confirmed.
HBO and Cinemax went out of pay-TV satellite and video streaming customers after Dish and HBO failed to agree to a contract that expired Wednesday at midnight. It is the first time in HBO history that its channels have been "darkened" due to a failed agreement with a television service provider.
Dish and HBO provided conflicting accounts of the dispute. Dish said in a statement that AT & T wants it to "pay a guaranteed number of subscribers, regardless of how many consumers HBO actually want to subscribe to."
But HBO President Simon Sutton tells WIRED that Dish had already paid a similar deal for a set number of subscribers, and that such deals are common in the industry. "We proposed several changes," says Sutton. "We offered them lower rates, a deal that would have allowed them to pay considerably less."
Both companies said they had given the other party the opportunity to extend the expiring contract in negotiations for a new contract , Dish claims that he continued the old contract, and then compensated for the difference between the old and the new contract. A new agreement had been made, an offer that the company alleged that HBO had rejected. Sutton said HBO had offered to simply continue the old contract until a new contract was concluded and Dish rejected.
Price disputes between content are rs and distributors are common, and Dish has sometimes obscured other channels ̵
The DOJ, which appeals to a federal judge, says it is now the case. "Unfortunately, this behavior is consistent with the outcome of the merger," a DOJ spokesman said in a statement. "We hope that the appeals court will correct the mistakes of the local court."
The consumer group "Public Knowledge" agrees. "This is another reason why the DC Court of Appeals should overturn the decision allowing the merger," said John Bergmayer, the organization's senior council.
Sutton denies that AT & T's influence on Dish's negotiations Dish had seemed to have no interest in a deal. "I think they decided long ago to work with us," says Sutton.
In other words, Dish's decision to hide the channels could be a publicity stunt that makes AT & T look bad before DOJ is called. Nonetheless, HBO has already responded to the blackout with a website pointing out other ways in which Dish subscribers can access HBO, including DirecTV.
Other great WIRED stories