AT&T has started telling its DirecTV and U-Verse customers to use a free streaming service to access dozens of blacked-out local channels that are operated by TEGNA.
In a message posted on some affected channels, AT&T says it is still working to reach a deal with TEGNA for the rights to distribute five dozen local ABC, NBC, CBS and independent stations in 51 regional television markets. The channels have been unavailable on DirecTV and U-Verse since Tuesday.
“We hoped to avoid any interruption of this channel,” a graphic posted on affected TEGNA-owned stations read Friday night. “Unfortunately, we are still working with TEGNA, the owner of this channel, to secure an agreement. We share your frustration and regret any inconvenience.”
In the meantime, AT&T is pushing customers to use the streaming service Locast in order to watch the affected channels. Locast is a free, not-for-profit streaming service that re-broadcasts local television channels over the Internet in two dozen regional television markets. Last year, AT&T made a $500,000 donation to Locast and began offering its app on some Internet-connected DirecTV boxes.
Unlike companies like AT&T, Locast does not pay for the right to re-distribute local broadcast channels online. Instead, the company exploits a loophole in American copyright law that allows not-for-profit companies to re-distribute broadcast signals without a carriage agreement. Locast does not charge its viewers for access to the channels in markets where its service is available, though it does interrupt live programming every 15 minutes with a request that viewers donate $5 a month until they do.
AT&T’s suggestion of Locast won’t benefit some TV watchers in markets like Sacramento and San Diego where the service isn’t yet offered, meaning customers who want to watch ABC affiliate KXTV (Channel 10) or CBS affiliate KFMB (Channel 8) will still have to hook up an antenna or switch to a competing service if they want access to those channels.
AT&T’s decision to encourage customers to use Locast is likely to frustrate TEGNA as both sides continue to negotiate toward a deal over the affected channels. Earlier this week, TEGNA said AT&T refused to “reach a fair, market-based agreement with us,” though the programmer didn’t say what its terms were.
AT&T, on the other hand, was a bit more forthcoming, with one executive accusing TEGNA of demanding “the largest rate increase ever,” which they assured would result in higher bills for its pay TV customers.
“Despite their own broadcast networks moving their most anticipated series off broadcast and into their own streaming ventures, these [carriage] fees have increased an average of 24 percent every year, year after year, since 2011,” an AT&T executive told The Desk. Those fees are redundant, the executive argued, because broadcast stations like the ones operated by TEGNA are available to customers for free with an antenna.
A person at AT&T who did not want to be identified but was familiar with negotiations between the two companies said AT&T had already offered TEGNA more money in order to keep the local stations on DirecTV and U-Verse.