[October 30, 2010] Dish, Fox reach agreement to return regional sports networks to air, avert World Series blackout Tweet Oct 30, 2010 (The Dallas Morning News - McClatchy-Tribune Information Services via COMTEX) -- CATASTROPHE AVERTED -- for now. Dish Network LLC and Fox Networks have reached agreements that put the Fox Sports channels back on the air and keep the local Fox network station from going off. Financial terms of the deal weren't disclosed. The agreement brings Dallas Stars and Mavericks broadcasts back for 440,000 Dish subscribers in the Dallas area, as well as FX and National Geographic Channel, and it ensures the final few games of the World Series on KDFW-TV (Channel 4) won't be interrupted. But by no means are TV viewers in the clear. Both near-term and long-term challenges remain for the traditional cable and satellite TV model. In the near term, local Dish subscribers still could lose ABC affiliate WFAA-TV (Channel 8) early Monday morning when the satellite company's contract to carry the station expires. ABC is home to the top-rated Dancing With the Stars. In total, WFAA and 14 other stations around the country owned by Dallas-based Belo Corp. are up for renewal on Dish. Those stations will go dark at midnight Sunday, just as Fox 4 could have gone dark without Friday's new deal. "Sunday at midnight, if there isn't a deal and they do not accept the extension, then WFAA and all the other Belo stations will go off Dish," said Peter Diaz, president of media operations at Belo. "We'll probably be working this over the weekend. We'll be working very, very hard." Dish spokesman Marc Lumpkin acknowledged that a WFAA blackout is possible. "We are in negotiations and hope to achieve a fair deal soon," he said. While the moral of the story seems to be that Dish subscribers are about as battered these days as the Texas Rangers' bullpen, this is quickly becoming the new reality for everyone who pays for television service. Whether you subscribe to Dish, DirecTV, AT&T Inc.'s U-verse, Verizon Communications Inc.'s FiOS or Time Warner Cable Inc. in North Texas, your provider has had or soon will have its own battle with a broadcaster. Time Warner Cable recently went down to the wire to renew its agreements with WFAA, as well as with ESPN and other channels owned by Walt Disney Co. In July, Dallas-based AT&T reached a last-minute deal with Rainbow Media to continue carrying AMC and other Rainbow channels. "The problem is, it's not going to stop after this year," said Kurt Scherf, principal analyst in Dallas with research firm Parks Associates. "It's Cablevision and Dish this year, and it's just going to be a revolving cycle and get more and more contentious." These disputes aren't always resolved before the viewer gets hurt. The Dish-Fox Sports rift resulted in a four-week blackout of Fox Sports Southwest in the Dallas area, causing sports fans to miss the Rangers' last few regular season games, as well as the season openers for the Stars and Mavs. And while local Dish subscribers no longer have to worry about missing any of the World Series, NFL football or top-rated shows like House and American Idol, that's not the case in the New York area. There, Fox network stations have been blacked out for millions of Cablevision subscribers for two weeks, as Cablevision and Fox parent News Corp. have been unable to reach terms on a new agreement. At their heart, these negotiations are over money. When Fox Sports went off the air, Dish said Fox was asking for a 50 percent increase over its previous fee, but Fox said that percentage was incorrect. With advertising revenue sinking and viewers beginning to migrate to free and low-cost online alternatives, broadcasters want cable and satellite and telecom providers to pay more for the right to distribute their shows. In 1992, federal rules were rewritten to give broadcasters the power to pull their programming from a cable provider if the two sides could not agree on terms. Initially, it was assumed that broadcasters would rarely use this power, since most viewers only had one cable option. By pulling the plug, broadcasters would be hurting themselves, since there were few, if any, competitors to the local cable company. So they would lose all potential advertising revenue. But over the last several years, satellite options have expanded and telecom companies like Verizon and AT&T have started offering their own video services in regions where cable providers previously dominated. Now, if a broadcaster pulls its signal from one provider, it can simply urge its viewers to sign up with a competing provider. And that's exactly what has happened. The cable and satellite and telecom companies think broadcasters should not have that much leverage. In a letter to the Federal Communications Commission, Cablevision urged the agency to step in and force Fox to puts its signal back on Cablevision's service while the negotiations continued and take a formal mediator role. "At this point, commission intervention in the dispute is critical," Cablevision chief operating officer Thomas Rutledge wrote in the Tuesday letter. It's unclear whether the FCC actually has the authority to step in and force a settlement, though, or to order a broadcaster to put its channels back on. Cablevision and the American Television Alliance, a trade group representing the providers, argue that it does. Fox says it doesn't. The FCC has declined to say what it's allowed to do. FCC Chairman Julius Genachowski issued a statement Friday about the Dish-Fox settlement that failed to clarify the matter. "I am pleased that Fox and Dish have kept in mind their responsibility to protect consumers from blackouts when they negotiate carriage terms," Genachowski said. "I urge Fox and Cablevision to complete their negotiations and end the impasse that has disrupted service to viewers." Sen. John Kerry, D-Mass., chairman of the Senate commerce communications subcommittee, has tentatively scheduled a hearing for Nov. 17 to explore beefing up the FCC's clout in these disputes. But even his proposed bill wouldn't prohibit broadcasters from pulling their signals when negotiations fail. As the companies battle, viewers could start finding alternatives. A growing number of tech companies offer a variety of methods for streaming or downloading shows from the Internet. Apple Inc.'s new Apple TV device lets viewers rent shows and stream them to their televisions; Netflix Inc. and Hulu offer free streaming services. So far, few viewers have cut the cable cord entirely, but there are signs that digital services are making inroads. Network equipment and software maker Sandvine reported earlier this month that Netflix streaming videos now account for 20.6 percent of Internet download traffic during the peak 8-10 p.m. hours in the U.S. That was second only to general Web browsing, which accounted for 22.7 percent of downstream traffic. And many of these online video viewers apparently like what they see. Research firm Strategy Analytics said this week that 13 percent of Americans plan to cut their pay TV subscriptions in the next 12 months and not sign up with another provider. Of course, not all of those cord cutters will necessarily become Internet video viewers, but they do have options other than paying for monthly cable access. The Strategy Analytics survey found that the most popular channels among pay TV subscribers are the big four networks: ABC, CBS, NBC and Fox. Those channels are also, as they've always been, available free as over-the-air broadcasts. Scherf at Parks Associates thinks that while online video viewing is growing, the real alternative for many cord cutters will be a good pair of rabbit ears. He said he wouldn't be surprised to see TV makers like Sony and Samsung start packing in antennas with their latest flat-screen sets, as an insurance policy for buyers wary of seeing their favorite channels go dark every time their cable company gets into a tussle with a broadcaster. "It would be a smart play, to say, 'Here are your local channels in crystal-clear high def,' " Scherf said. To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com. Copyright (c) 2010, The Dallas Morning News Distributed by McClatchy-Tribune Information Services. 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