Dish is a shining example of the pay-TV industry’s greed-driven culture…

By Robert C. Kenny | October 24, 2014

Dish network, once a new, vibrant upstart in the U.S. video marketplace, is now a satellite television heavyweight, prominently known for poor service and its pervasive lack of concern for its own customers and employees.

Dish regularly generates harsh and unforgiving reactions from its customers and employees. The company’s track record is one of marketplace rule-breaking and misleading promotional tactics. Its behavior exemplifies the pay-TV industry’s penchant for exorbitantly high profits that do nothing to advance the public interest.

As Dish continues to seek statutory and regulatory advantages from both Congress and the FCC, consumers have a right to question whether an entity with a history of a fostering a poor work environment and providing dismal customer service should be granted government favors in the name of competition.

In 2009, 46 state attorneys general forced Dish to pay a $6 million settlement after officials found that the company used “improper” marketing and promotional tactics to sell its products and services. Dish was found guilty of hiding or omitting existing restrictions in satellite TV packages when advertising to potential or current subscribers.

This pay-TV provider has demonstrated a pattern of behavior that underscores an increasing disconnect from its customers in its search for greater profit margin. These actions and similar ones by other pay-TV providers makes clear why broadcast TV stations and cable channels find it increasingly difficult to reach agreement with Dish and others during negotiations for programming rights.

Dish is no stranger to stalled programming disputes that have led to the blackout of broadcast TV stations for their 14 million subscribers. Since January 2013, Dish has been directly involved in one-third of all reported retransmission disputes with broadcasters resulting in TV blackouts.

Moreover, Dish has been squarely in the middle of several programming disputes with cable networks in recent years. A memorable dispute between Dish and the AMC network in 2012 resulted in Dish customers losing access to the America Movie Channel, We TV and IFC for weeks.

Dish’s refusal to compromise continues to this day, evidenced by its ongoing stalemate with Turner Broadcasting over the rights to deliver Turner cable channels, CNN, TruTV, and the Cartoon Network, among others, to its customers. With an important election just days away, the timing of this stalemate couldn’t be worse for millions of Dish subscribers who may enjoy watching CNN for updates and breaking news on political races of importance to them.

Once again, Dish is the primary catalyst in causing TV programming blackouts in the marketplace, emphatically arguing that higher programming costs will be passed along to their customers.

Dish’s dispute with Turner Network could become increasingly heated in the next few weeks when additional stations, TNT and TBS, come up for renewal. While the dispute over rate increases amounts to pennies per customer, it could end up costing Dish subscribers access to NBA basketball games on those stations.

If Dish is really serious about finding cost savings for subscribers, it, along with all pay-TV companies, should give significant consideration to the costly impact excessive equipment rental fees are having on their customers and implement real solutions to reduce this charge and help lower monthly bills.

Dish is a shining example of the pay-TV industry’s greed-driven culture, and it needs to change.

Ironically, the company’s excessive anti-consumer behavior is helping fuel a major new push in Congress that could result in new and stronger consumer protections to guard against the confusing and deceptive billing practices of cable and satellite TV companies in America.

Congress, led by U.S. Senator Claire McCaskill (D-MO), is focused on bringing transparency and fairness to cable and satellite TV billing practices – an outcome that tens of millions consumers will whole-heartedly embrace across America.

Change can be for the better and we look forward to it.

* * *

Robert C Kenny is the Director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations, and other independent organizations; he formerly served as Press Secretary at the FCC.

Read More

By Robert C. Kenny | October 16, 2014

The average American consumer spends nearly three hours each day online, including a half-hour devoted exclusively to watching video. 

Not surprisingly, recent studies confirm a strong relationship between television viewing and online video streaming – showing that the nation’s most prolific Internet users also watch the most TV.  Furthermore, an overwhelming majority of consumers strongly value television programming and the ability to watch it on multiple digital platforms. 

Broadcast TV remains among the most popular programming in America on every digital platform. According to Nielsen, the vast majority of video being viewed is professionally created content, like the shows commonly viewed on traditional broadcast TV networks.

These consumer trends present pay-TV companies and content providers – including broadcasters and cable networks – with new opportunities and challenges. Due to tighter household budgets, however, many subscribers find their options for TV severely limited. They have to either sign up for cheaper programming bundles or cut the pay-TV cord altogether. This puts the ball squarely in pay-TV’s court to do more to help consumers going forward.

Coupled with the deployment of revolutionary broadband technology across the nation, these economic pressures are driving rapidly changing viewing preferences. High-speed broadband services have empowered Americans to “cut the cord” and watch the shows they enjoy the most via a combination of free, over-the-air broadcast TV and online services — without being saddled with a $100-plus, per month, cable or satellite TV bill.

With tens of thousands of consumers cutting the pay-TV cord each year, Nielsen has characterized subscriber declines as a “real phenomenon.”

Moreover, a new trend known as “cord-shaving” has emerged among pay-TV subscribers, where consumers opt for smaller bundled programming packages – including affordable online access to specific content.  Based on the latest data, it is clear that a growing number of consumers are signing up for cheaper bundles that cost between $10 and $50, on average, to lower their monthly pay-TV bills.  In fact, $20 basic cable plans that include little more than broadcast and public access channels now account for 12% of pay-TV subscriptions nationwide, up from 8% just a few years ago.

These recent developments have heavily impacted the video marketplace. For example, the top 40 rated cable networks have collectively lost 3.2 million traditional pay-TV subscribers since 2010 due to cord-cutting and cord-shaving. Something has to give, right? No doubt this growing trend imposes significant pressure on pay-TV providers to adapt to this evolution of the video marketplace, not only with regard to subscriber-targeted marketing, but also in efforts to secure precious local advertising dollars in competition with TV broadcasters.

This may help explain why cable lobbyists are trying to persuade Washington lawmakers to eliminate broadcast TV from the lifeline basic service tier, which is the most affordable cable programming package now accessible to subscribers. The basic tier is not the enemy and, in fact, should be embraced by the pay-TV industry.

The basic tier is vastly important, guaranteeing cable subscribers’ access to local broadcast TV news and programming, weather updates and emergency alerts. Eliminating this provision would be extremely detrimental to cable subscribers and ultimately hurt the long-term sustainability of local TV stations in smaller markets that must fight as stand-alone operations against a consortium of big pay-TV companies for advertising sales.

Congress created the lifeline basic service tier to protect consumers’ access to local broadcast TV on cable systems. Given cable’s continued dominance in the majority of local television markets, and the fact that millions of cable subscribers now seek cord-cutting or cord-shaving as a way to lower their monthly bills, now, more than ever, the preservation of broadcast TV stations on cable’s basic tier remains a public necessity.

Instead of focusing on fighting the basic service tier provision on cable systems, the pay-TV industry should instead look inward, and develop new policies and protocols that establish transparency in monthly billing practices and mitigate erroneous charges.

If pay-TV providers were to implement improvements in billing practices, it may actually result in considerable cost savings on customer service expenditures over time, especially if upfront protocols are implemented that effectively identify and correct billing errors on behalf of consumers in the first place.

Hopefully, cable and satellite TV providers are up to the challenge and will move forward with others in Washington to help reshape America’s media landscape for the better. I am sure the American consumer would like to bank on it.

* * *

Robert C Kenny is the Director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations, and other independent organizations; he formerly served as Press Secretary at the FCC.

* * *

Please visit the TVfreedom.org YouTube web page to watch consumer-friendly videos aimed at pushing back on the pay-TV industry’s gamesmanship in the marketplace and the ongoing abusive billing and business practices hurting consumers.

Read More

Today, TVfreedom.org Director of Public Affairs Robert C. Kenny writes in Broadcasting & Cable about the disconnect between the current reality of the video marketplace and the state of the regulatory framework crafted by the FCC. Kenny pays special attention to the unfair regulatory advantage that the FCC has given pay-TV over broadcasters with regards to JSAs. An excerpt:

“Government policies help influence the course of the communications industry and its impact on consumers and society at large. We bear witness to how sound regulatory policies, based on a fundamental understanding of markets and consumer preferences, can help foster an environment that enables technological innovation and convergence to drive investment, promote competition and enhance consumer choice.

That’s why it is essential that government action reflects the true state of the marketplace and is supported by a factual foundation that is data-driven and grounded on fact-based analysis. 

Yet, the Federal Communications Commission (FCC), the independent regulatory agency responsible for guiding communications policy, appears adrift from its traditional moorings of fact-based, data-driven decision-making.”

Read the full piece here.

Read More

Robert C. Kenny, director of public affairs for TVfreedom.org, writes in The Hill about the greed of the pay-TV industry, and Congress’ misplaced efforts on fighting increased costs for America’s cable and satellite consumers. Kenny writes, “Congress—at the behest of the pay TV lobby– has been spending much taxpayer time and effort to address only the $3 portion of your cable and satellite bill and ignoring prime areas of potential consumer abuse by the nation’s pay-TV operators.  Why has Congress largely ignored the $7 billion per year that cable and satellite TV companies require subscribers to pay in equipment rental fees for DVRs and set-top boxes?”

Read the full op-ed here.

Read More

By Robert C. Kenny | September 11, 2014

America’s growing dissatisfaction and frustration with the pay-TV industry continues to accelerate as an uncompetitive market structure has enabled an array of well-documented industry-wide practices to ratchet monthly bills upward for America’s cable and satellite TV consumers. Highly publicized incidents of poor customer service over the past couple of months have brought unflattering notoriety to the cable and satellite TV industry.

Let’s face it… Today, consumers bear the financial burden of satisfying the pay-TV industry’s insatiable desire to expand profit margins at nearly any cost. Symptomatic market failures have allowed cable and satellite TV providers to slide into a world where arbitrary pricing, shoddy customer service, outages, and pervasive erroneous billing is prevalent and commonplace.

While TVfreedom.org recognizes that the consumer fact-gathering campaign initiated by U.S. Senator Claire McCaskill (D-MO) will be instrumental in helping curb the pay-TV industry’s deceptive business and billing practices, Congress possesses the ability to reverse this trend of constant consumer abuse as it embarks on reforming the nation’s video marketplace. According to recent news reports, Sen. McCaskill is contemplating holding a Congressional hearing before year’s end focusing on the deceptive business and billing practices of cable and satellite TV providers.

As part of a robust Congressional examination of the pay-TV industry, TVfreedom.org urges lawmakers to create a “National Consumer Protection Plan” (NCPP) for America’s pay-TV subscribers. The NCPP should be guided under the principles that consumer satisfaction is top priority, and that consumers must be empowered with the tools necessary to address recurring billing errors, ‘surprise’ charges and inferior service quality. We believe that the negative economic impact of pay-TV fees and billing practices on the American family budget highlights the need for Congressional action.

Legislation necessary to implement the NCPP should better define the jurisdiction, roles and responsibilities of federal regulators, namely the Federal Communications Commission (FCC), that can aid consumers and address existing market failures in the video marketplace. Today, government oversight of the cable and satellite TV industry is under the jurisdictions of states and local franchising authorities, which has resulted in significant variations in state-by-state government oversight.

Imagine the public outcry if that were the case for wireless voice and broadband services in America. It makes one wonder… Why over the past 20 years has the pay-TV industry largely been left unchecked by federal lawmakers and regulators – especially when industry-wide market failures are pervasive?

Consumers would welcome it if cable and satellite TV providers took the initiative to self-correct billing errors and proactively implemented business policies and practices that helped lower customers’ monthly bills, but it just hasn’t happened.

In its development and implementation, TVfreedom.org believes that the “National Consumer Protection Plan” must uphold, support and promote a series of strong consumer protections at the federal level related to marketing, subscriber promotions, contractual agreements, truth-in-billing practices, service reliability, outage reporting, subscriber complaints, customer service, and service cancellation policies.

* * *

Robert C Kenny is the Director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations, and other independent organizations; he formerly served as Press Secretary at the FCC.

* * *

Please visit the TVfreedom.org YouTube web page to watch consumer-friendly videos aimed at pushing back on the pay-TV industry’s gamesmanship in the marketplace and the ongoing abusive billing and business practices hurting consumers.

Read More

Tvfreedom.org Director of Public Affairs Robert C. Kenny writes on The Hill’s Congress Blog about how lawmakers in Washington, D.C. continue to give regulatory and policy advantages to the pay-TV industry while neglecting to look out for the average American consumer. As debates over the future of television rage in the halls of Congress, one thing is clear as the pay-TV industry continues seeking self-serving “reforms”: cable and satellite companies are solely concerned with their bottom lines, and not with improving the overall pay-TV experience. Read about the pay-TV’s latest attempt to game the sytem, here:

Nothing more than a ‘choice’ deal for pay-TV

Read More

Today, TVfreedom.org released a new video featuring the experiences of real pay-TV subscribers. This video details the skyrocketing prices of cable and satellite television, and the misleading and opaque billing practices that customers experience every day. As many Americans continue to see their pay-TV bills rise to unsustainable levels each month, it is time for Congress to stem the greed of America’s cable and satellite providers and start looking out for consumers. Pay-TV is doing just fine; it’s time to stop giving the industry legal and regulatory advantages. ​​​

Read More

By Robert C. Kenny | September 3, 2014

As the Congressional session draws to a close, a move is afoot in the Senate Commerce Committee to introduce a last-minute legislative proposal — known as “Local Choice” – designed to permanently shift the competitive landscape of the nation’s video marketplace by granting the cable and satellite TV industry an unfair regulatory advantage over television broadcasters.

The proposal was first floated as an idea by Time Warner Cable during its retransmission consent dispute with CBS back in August 2013, when it offered to sell the CBS channel to subscribers on an à la carte basis. The proposal also mimics a March 2014 ex parte filed by rural cable giant Mediacom at the Federal Communications Commission (FCC). This Congressional plan would essentially allow cable and satellite TV providers to separate out local broadcast TV stations from cable network programming and offer these channels to their customers on an à la carte basis.

Similar itemized pricing and channel distribution models have been widely criticized by the cable and satellite TV industry in the past. In fact, the pay-TV lobby has collectively dismissed such proposals as unproven business models that would create uncertainty in the marketplace and result in increased costs for consumers. By their own admission, the core à la carte components of the Local Choice proposal raise significant policy questions regardless of how and to which sector of the industry it is applied.

Even the American Cable Association (ACA), the biggest cheerleader for Local Choice, agrees that this proposal, if implemented, would cost consumers more to access broadcast TV channels. ACA President and CEO Matt Polka publicly stated this week that, “Local stations… would be able to command truly rich market rates (from consumers).” Does this sound like a pro-consumer statement? No.

What the pay-TV lobby is really attempting to do under Local Choice is decrease the number of subscribers who watch local broadcast TV on their systems, giving them a market advantage to pull in more advertising revenues over broadcast TV stations. This will lead to many local TV stations setting their channel rates at unattractively higher prices in an attempt to make up for lost pay-TV viewers and, subsequently, lost advertising revenues. The higher prices will result in more and more subscribers choosing not to pay to receive all of their broadcast TV channels as part of their pay-TV service. This is bad economics and it hurts consumers and America’s local TV stations, especially in small-town rural America.

Given the proposal’s negative impact on competition – as well as America’s television viewers and local TV stations – little justification exists for Congressional haste to pass such legislation by year’s end.

Congress must act with openness and transparency, and move forward with a more inclusive process to address comprehensive statutory reform, while still allowing Congress to take immediate legislative action to reauthorize the Satellite Television Extension and Localism Act (STELA) before the close of this legislative session.

There is no need to rush Local Choice to a vote this legislative session without allowing for a robust public dialogue. The best way to do this would be to hold a series of Congressional hearings to address the issues that Local Choice raises for consumers, competition and the future of the U.S. video marketplace.

* * *

Robert C Kenny is the Director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations, and other independent organizations; he formerly served as Press Secretary at the FCC.

Read More

By Robert C. Kenny | September 2, 2014

During the past 15 years, pay-TV subscribers have had a front row seat to ever-increasing monthly cable and satellite bills. They have been the victims of erroneous billing charges, excessive equipment rental fees, and year-after-year consumer price hikes more than twice the rate of inflation. A new legislative proposal, dubiously named “Local Choice,” is being pushed by some pay-TV industry advocates. This proposal would impose à la carte requirements on local TV stations – and only local TV stations. 

What does this mean in practice? Today, local broadcast stations are included in pay-TV’s basic tier – the cheapest, most affordable package available to consumers. So even if you can only afford just over $20 a month for basic cable, you’re still able to access local news, emergency weather information and sports – like NFL games, college football and NASCAR races, along with other popular entertainment programming on broadcast television. This “Local Choice” proposal would strip most broadcasters out of the cable basic tier and require viewers to “opt in” to purchase their local TV stations – and, no surprise, pay extra for each of the stations they select from an à la carte menu. 

Astonishingly, this “choice” would only apply to local TV stations and broadcast networks like ABC, CBS, NBC, FOX and Univision – which host the most-watched and most popular TV shows by far. This proposal unfairly singles out only one kind of programming – local TV stations – for regulatory distribution mandates.

News flash: there will be no real savings for consumers under Local Choice. Viewers will continue to pay for their expensive cable programming bundle, and under this proposal will be forced to pay extra fees to access and manage their local broadcast TV station lineup as part of their pay-TV service.

So, what’s driving this grossly unfair and selective à la carte proposal? Three faulty assumptions: (1) local TV is driving up the cost of consumer cable bills; (2) broadcast TV blackouts are rampant; and (3) programming blackouts must be stopped for the benefit of consumers. Unfortunately, this proposal fixes none of these alleged problems. First, the cause of spiraling pay-TV rate increases has nothing to do with local television stations. In fact, broadcast TV stations are among the most reasonably priced channels in your cable package. Local channels contribute a mere $3 to an average American’s $65 pay-TV bill – a monthly bill that can easily double when pay-TV companies tack on the costs for HD set-top boxes, DVRs and premium cable channels to the customer’s programming package.

Second, the Washington pay-TV lobby is manufacturing a crisis regarding broadcast TV blackouts when, in reality, hundreds of deals are quietly reached each year through free-market retransmission consent negotiations. In addition, in the rare instances in which a broadcast TV blackout occurs, it is typically resolved quickly, with limited disruption to pay-TV subscribers.

Third, this pay-TV scheme will do nothing to stop the blackouts of cable channels. For example, this proposal won’t bring the L.A. Dodgers pay TV sports channel to cable and satellite viewers in California who have been unable to watch their beloved baseball team – a World Series contender – for the entire 2014 season. Nor will this proposal prevent contractual disputes between pay-TV providers and cable networks that have resulted in indefinite, and perhaps permanent, cable channel blackouts.

Let’s be clear, the “Local Choice” legislative scheme gives TV viewers anything but more “choice.” Let’s take a look at the predictable consequences:

• Cable and satellite TV bills will increase. By requiring consumers to pay separately for local TV stations, viewers will be forced to pay more for what they can get now as part of a cable or satellite programming bundle. Today, a local broadcaster hypothetically charges a pay-TV operator 75 cents per subscriber to resell that station as part of a programming bundle. But under an à la carte scheme, that same station will be forced to charge $2 per subscriber (or $3, $5 or $10) to make up for the revenue loss from fewer viewers. Lower viewership means less audience share, and less audience share means lower advertising dollars for local TV stations. Of course, the costs necessary to produce high valued entertainment, sports and local news won’t change. To maintain current programming, those costs will have to be recaptured by charging more for the product. Viewers who “opt in” to keep those local channels will pay dramatically higher rates.

• America’s television viewers will soon have fewer local broadcast TV options. The corresponding reduction in advertising revenues could cripple some local broadcasters, particularly those in smaller markets and Spanish language stations. Local TV stations – which offer lifeline tornado and hurricane coverage that truly saves lives in times of emergency – would see diminishing revenues, and many simply will not survive. This will have a dramatic impact on television viewers, especially those living in small-town, rural America where local TV stations will be hit the hardesteconomically.

And who benefits from a reduction in local TV stations? Clearly it’s the pay-TV companies who want to kill competition from a free and local TV source. That’s why this legislative scheme is being lauded by a pay-TV cabal led by the American Cable Association (ACA) and American Television Alliance (ATVA) members Time Warner Cable, DirecTV and Charter Communications – companies that receive nearly universal scorn for shoddy customer service, price-gouging and rampant greed. 

Ironically, these are the very companies who have fought to prevent à la carte regulations from being imposed by the FCC on their pay-TV systems. They all argued vehemently against such regulation, ushering thousands of pages of data-supported arguments into the FCC showing that transitioning to an à la carte model would be cost prohibitive, would result in skyrocketing price hikes and would diminish program diversity.

What this policy flip-flop tells us is that this proposal is all about giving cable and satellite companies an upper hand in the TV marketplace, not about what’s best for consumers. What consumer is saying “I want to pay more to watch the NFL, 60 Minutes, the Olympics and Modern Family”? Everyone knows, cable bills are high enough.

Local Choice is ill-conceived and unwarranted. The proposal was only recently released; there have been no public hearings; no studies to determine the financial and economic impact on consumers; and no consideration of the impact on Latino, African-American and other niche programming viewers.

The sad fact is that Local Choice would devastate the economics of local broadcasting, a free and indispensable service available to all Americans. It will only drive up consumers’ monthly pay-TV bills and force them to pay more for broadcast TV programing, it will drive local TV stations off the air, and it will NOT provide pay-TV subscribers with needed consumer protections to guard against the deceptive billing practices of pay-TV providers.

It’s a bad deal for everyone…except cable and satellite TV providers.

* * *

Robert C Kenny is the Director of Public Affairs for TVfreedom.org, a coalition of local broadcasters, community advocates, network TV affiliate associations, and other independent organizations; he formerly served as Press Secretary at the FCC.

Read More

As the Federal Communications Commission (FCC) mulls public comments regarding its broadcast exclusivity rules, Robert C. Kenny, director of public affairs for TVfreedom.org, writes in Broadcasting & Cable about the importance of localism in the American video marketplace. Currently, the pay-TV industry is attempting to undermine the existing broadcast exclusivity rules, which would directly harm local TV stations’ ability to create and distribute highly valuable content to local communities. Kenny challenges FCC Chairman Wheeler to protect local broadcast television, and not cave to the will of the pay-TV industry. Read the full op-ed here.

Read More