Dish Network Corp. has filed a lawsuit against NBCUniversal and will seek binding arbitration to prevent NBC channels from dropping off Dish broadcasts after the looming expiration of a channel carriage agreement between the companies.
Douglas County-based Dish (Nasdaq: DISH) filed a breach of contract complaint Tuesday in U.S. District Court in Illinois against the TV programming company, which is owned by Philadelphia-based Comcast Corp. (Nasdaq: CMCSA).
Matthew Staver | Bloomberg
Dish also said it will pursue binding arbitration to resolve the channel dispute. The ability to seek arbitration is part of a provision required by federal regulators' approval of Comcast Corp.'s acquisition of NBCUniversal in 2011.
"NBC is forbidden from blacking out its networks if a pay-TV provider chooses, in its sole discretion, to exercise its right for binding arbitration, " Dish said in statement. "Regulators implemented these conditions to prevent Comcast and NBC from harming consumers and competition."
The contract that permits Dish satellite broadcasts to carry the NBCUniversal programming is due to expire as soon as Sunday.
The companies have so far failed to renew the agreement, meaning NBC-owned local TV stations as well as several NBC cable channels such as Bravo, CNBC, MSNBC, Syfy, Telemundo, Universal HD and USA could be dropped from the channel lineups of millions of Dish subscribers.
(The NBC affiliate in Denver, KUSA-9News, is owned by another company, Tegna Inc.)
"Should Dish proceed with arbitration, we will of course participate in the process, and [we] look forward to receiving the fair market value for our portfolio of networks, " said NBCUniversal in a statement sent by Caley Gray, NBCUniversal vice president of communications.
NBC has lobbied viewers with messages to complain to Dish Network about NBC channels possibly disappearing from Dish’s satellite transmissions.
That campaign violates terms of the carriage agreement barring NBC from making public messages related to the contract’s expiration, Dish claims in its lawsuit.
“NBCU has ignored its contractual obligation not to engage in these types of public communications and has instead decided to bombard DISH subscribers with prohibited messages, including, among other things, warnings that DISH is going to 'drop' the NBC Programming, and has included 'calls to action' in direct violation of the contracts, ” Dish's lawsuit said.
The customer complaints and subscription cancellations that flood in after the ad campaign harm Dish Network, its lawsuit contends.
Dish Network is the nation's No. 2 satellite TV broadcaster. It has 13.9 million subscribers, counting an estimated 500, 000 to 600, 000 people who subscribe to Dish's online streaming video service Sling TV.Traffic stats
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