Dish Network Chairman Charlie Ergen during today’s earnings call expounded on HBO and Cinemax going dark on Dish and accused AT&T of a “purely anticompetitive play.”
Ergen argued that AT&T asking Dish to pay for a guaranteed number of HBO subscribers while also giving HBO away for free to AT&T wireless subscribers could be considered “malpractice.”
“There’s no company that would sign up for a deal like that,” Ergen said.
He admitted that what AT&T is doing makes sense: The provider will lose the money from Dish in terms of the subscribers Dish is paying on, but it will then get those subscribers back because DirecTV is the only other alternative for many of Dish’s rural customers.
“This is purely an anticompetitive play that we tried to warn about,” Ergen said. “We can’t sign a deal where we would actually pay for their customers, and that’s what it would be.”
HBO CEO Richard Plepler responded to the Dish earnings call with a statement clarifying that it was Dish that chose to take down HBO and not the other way around.
"We’re actually perplexed by their unwillingness to take this proposal as an opportunity rather than perpetuating a conflict which only hurts consumers. The notion that AT&T had anything to do with our inability to reach a reasonable deal with DISH is simply not true. It seems to be a silly but transparent attempt on DISH’s behalf to muddy the waters for reasons only they can explain," Pleper said.
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Ergen’s comments follow a back-and-forth that erupted last week after HBO went dark on Dish, which is the first time in the premium channel's more than 40-year history that it has been taken down from a distributor’s platform.
"It seems AT&T is implementing a new strategy to shut off its recently acquired content from other distributors. This may be the first of many HBO blackouts for consumers across the country. AT&T no longer has incentive to come to an agreement on behalf of consumer choice; instead, it's been given the power to grab more money or steal away customers,” said Andy LeCuyer, Dish senior vice president of programming, in a statement.
HBO responded by saying that in its more than 40 years of operation, it has always been able to reach agreements with distributors, but that Dish is being “extremely difficult” and is responding to good faith negotiations with “unreasonable terms.”
“Past behavior shows that removing services from their customers is becoming all too common a negotiating tactic for them. We hope the situation with Dish changes soon but, in the meantime, our valued customers should take advantage of the other ways to access an HBO subscription so they can continue to enjoy our acclaimed programming," HBO said.
The carriage dispute takes on a new wrinkle in light of the U.S. Justice Department’s upcoming appeal of a court decision allowing AT&T’s $85 billion acquisition of Time Warner to proceed without conditions. AT&T accused the DOJ of collaborating with Dish ahead of the oral arguments set for Dec. 6, and the DOJ said AT&T’s behavior is consistent with what the DOJ predicted would happen if the merger was allowed.