HBO disappears from the dish as a monopoly concern

When AT & T announced its intention to acquire the parent company of HBO, Time Warner, competitors, consumer groups and the Department of Justice argued that the merged company would cause harm to the competition. Now, these critics say their concerns are being validated.

HBO and Cinemax have stopped silencing on Satellite TV and streaming video customers of the satellite TV provider after Dish and HBO have failed to reach an agreement to replace a contract expiring Wednesday night at midnight. This is the first time in the history of HBO that its channels are "hidden" as a result of the lack of a contract with a television provider.

Dish and HBO presented conflicting accounts of the dispute. Dish said in a statement that AT & T wanted to "pay a guaranteed number of subscribers, regardless of the number of consumers who actually want to subscribe to HBO."

But HBO president Simon Sutton told WIRED that Dish had already made a similar deal to pay a set number of subscribers, and that such deals are common in the industry. "We had proposed various changes to this for the future," Sutton said. "We offered them lower rates, an agreement that would have allowed them to pay a lot less."

Both companies stated that they gave the other party the opportunity to extend the expiring contract while negotiating a new contract. Dish claims to have offered to continue under the old contract and then settle the difference between the old and the new contract once a new deal had been passed, an offer that the company claims that HBO had refused. Sutton says that HBO has offered to simply continue the old contract until a new contract is finalized and Dish is refused.

Tariff disputes between content providers and distributors are common and Dish has sometimes overshadowed other channels, including the Spanish network Univision, which is currently in the dark. What makes the conflict between HBO and Dish particularly controversial is that, besides HBO, AT & T owns the competing DirecTV satellite service and the DirecTV Now streaming service.

When the Department of Justice unsuccessfully pursued AT & T's purchase of Time Warner last year, it warned that AT & T could use its pay-TV provider role with a national scope to encourage other providers to pay more for Time Warner programming. If a cable or satellite provider such as Dish could not broadcast HBO, customers could turn to DirecTV.

The Department of Justice, which is appealing a federal judge's decision to authorize the merger, says that's what's happening right now. "This behavior, unfortunately, is consistent with what the Justice Department predicted as a consequence of the merger," said a spokesman for the DOJ in a statement. "We hope the Court of Appeal will correct the mistakes of the district court."

The Public Knowledge consumer group agrees. "This is another reason why the Washington Court of Appeals should overturn the decision authorizing the merger," said the organization's senior council, John Bergmayer, in a statement.

Sutton denies that AT & T had any influence over the negotiations with Dish, and says Dish did not seem interested in an agreement. "I think they decided to go to sleep with us a long time ago," says Sutton.

In other words, Dish's decision to turn off the channels could be a publicity stunt that would make AT & T look bad before the GM's call.

Nevertheless, HBO has already reacted to the outage by offering a website suggesting Dish subscribers other ways to access HBO, including DirecTV.

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