Key Points
- Gray Media has accused Dish Network of illegally distributing a local CBS affiliate after a contract lapse.
- The complaint alleges Dish provided the station to hotels via its SmartBox business service despite expired rights.
- The dispute highlights rising tensions over retransmission fees and shifting economics in the pay TV market.
- Read more coverage of Gray Media | Full coverage of carriage dispute with Dish
Gray Media has accused satellite broadcaster Dish Network of violating its copyright by offering a local television station in Tennessee to hotels and other commercial establishments through its business-to-business services.
In a complaint submitted to the Federal Communications Commission (FCC) this week, Gray Media said its Senior Vice President of Government Relations and Distribution Robert Folliard visited a hotel located in Knoxville in mid-March, where he was able to watch TV programming from the company’s CBS affiliate WVLT (Channel 8).
WVLT and other Gray Media-owned stations were removed from Dish Network earlier in the month after a distribution agreement between the broadcaster and the pay TV company expired without a new contract in place. Despite the lapse, Gray Media said it learned from hotel staff that WVLT was provided to its guests by Dish Network through the use of equipment known as a SmartBox, which allows businesses to offer more than 100 high-definition channels to TV sets without dedicated set-top box hardware.
Dish Network sells TV packages to businesses that are separate from the plans offered to residential subscribers. Typically, distribution agreements for local broadcast stations are negotiated through contracts that cover both residential and business customers of a pay TV service at the same time.
In its complaint, Gray Media didn’t say how it learned that the hotel in question used a SmartBox, only that hotel staff said the TV signals offered to its guests originated from Dish Network. The company also didn’t say if it investigated whether TV programming was offered to guests from more than one source. Some hotels install TV antennas to provide over-the-air channels like WVLT to its customers, and Dish Network’s own marketing materials cited by Gray Media say an antenna can be installed with an optional accessory to make broadcast channels available through the SmartBox platform.
The complaint seeks numerous remedies, including an order that prevents Dish Network from distributing Gray Media-owned local TV stations to businesses and a list of any other stations Dish Network might have provided through its business-to-business TV packages after its contract to offer those stations expired in March.
Dish Network has not commented on the complaint, and it isn’t clear if the FCC has opened a formal investigation.
Disputes between broadcasters like Gray Media and pay TV distributors like Dish Network have become more common in recent years as programmers seek higher fees for the entertainment, news and sports carried on their channels and networks.
Local TV broadcasters have justified the costs charged to cable and satellite providers by pointing to rising affiliation fees associated with the Big Four networks — ABC, CBS, Fox and NBC — which have made larger financial investments in premium sports and news, only to pass those costs on to local TV station owners.
Broadcasters have also faced a tougher advertising market in recent years as more ad buyers shift their budgets toward connected TV platforms, which offer more-granular data on campaign performance and stronger returns with lower financial investments. Broadcasters, including Gray Media, have pushed the FCC to adopt a proposal that would force the country’s local TV stations to transmit through a new standard called NextGen TV within the next few years, allowing them the opportunity to air personalized advertisements through their TV signals similar to those found on streaming platforms.
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