HBO Blackout on Dish May Hurt Customers for Awhile

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HBO went dark on the Dish satellite network Thursday after the companies failed to reach an agreement to replace a contract that lapsed midnight on Wednesday. HBO claimed Dish blacked out the cable channel and said the action marks the first time in HBO’s 46-year history that it went dark on a pay-TV provider. Dish claimed HBO withdrew content.

Dish (DISH: NASDAQ), based in Englewood, Colorado, said yesterday that HBO parent AT&T has made an “unprecedented move to pull HBO and Cinemax content from Dish and Sling TV subscribers, after making untenable demands designed specifically to harm customers, particularly those in rural areas, as well as damage competing pay-TV providers.” Sling TV is an internet service owned by Dish.

AT&T (T: NYSE) acquired Time Warner in a deal that included HBO and Cinemax earlier this year, over concerns that the acquisition might stifle competition. The Department of Justice in August appealed the decision that allowed the deal to move ahead.

“The merger created for AT&T immense power over consumers,” said Andy LeCuyer, Dish senior vice president of programming, said in a statement. “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.”

Dish claims the blackout is particularly harmful to Americans living in rural regions who don’t have the same broadband access as customers residing in urban areas. Dish says the majority of its HBO subscribers live in rural areas with limited broadband access and likely won’t be able to view offerings from HBO or Cinemax without a satellite connection.

An HBO rep told the New York Post that Dish “is making it extremely difficult, responding to our good faith attempts with unreasonable terms. Past behavior shows that removing services from their customers is becoming all too common a negotiating tactic for them.”

Dish has imposed blackouts on other partners including Fox News, Tribune Media and Spanish-language broadcaster Univision.