Ergen: Retrans rules bigger threat to consumers than new set-top rules

The FCC's newly approved rules aimed at unlocking the pay-TV set-top box business have been getting a lot of attention. But Dish Network (NASDAQ: DISH) CEO Charlie Ergen said retrans rules, which are currently being considered for revision by the FCC, are more pertinent to consumers.

"They're so one-sided, particularly to the network broadcaster," Ergen said Thursday during a fourth-quarter earnings call. "That decision will have more impact on consumers than new set-top rules."

The FCC is currently in the process of reviewing the "totality of the circumstances test" around retransmission negotiations between broadcaster stations owners and cable and satellite providers, in order to ensure all parties are negotiating in good faith.

Dish, which has found itself on one end of contentious battles regarding retransmission negotiations leading to several channel blackouts, hopes that the FCC will make meaningful changes to the rules. The satellite operator said that broadcasters have local monopolies and "hold consumers hostage" when it's time to renegotiate carrier deals.

Retrans negotiations are one aspect that Dish cites as holding up local linear broadcasts from showing up on OTT services like Sling TV, but the operator said it's willing to work with both network affiliates and owned-and-operated stations on agreements.

Ergen said that broadcasters can grow their business by taking advantage of platforms like Sling TV, which offers new, dynamic ad models that can help broadcasters get back some of the ad money they're losing to web platforms like Facebook.

Although Dish still isn't breaking out the financials and subscriber numbers for Sling TV, the company says that interest has been strong, primary among cord-cutters and cord-nevers and less so among traditional pay-TV subscribers.

Dish said it is working to get two to three more content providers added to Sling TV and then after that it will be done for a while with content deals, shifting focus toward upgrading Sling's user interface to better accommodate 80 to 100 channels.

As for the FCC's new set-top rules that passed today on a party-line vote, Dish is opposed. Dish General Counsel R. Stanton Dodge said during Thursday's call, "It's really not clear to us that any new regulation is needed to promote innovation. It actually might hinder it."

Dish's comments echo those of pay-TV operators like AT&T (NYSE: T), third-party vendors like Roku, and industry organizations like NCTA, all of whom oppose the new regulations while set-top manufacturer TiVo and tech giant Google (NASDAQ: GOOG) both support the new measures.

For more:
- listen to this Dish Network earnings call

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