It looks like there’s no end in sight for U-verse-WRAL stalemate

If local AT&T U-verse customers are hoping to get NBC and Fox back in time to watch N.C. State play Notre Dame on Saturday or the rest of the Dodgers and Astros in the World Series, here’s the bad news: it’s very unlikely that is going to happen.

Jimmy Goodmon, the president and chief operating officer of Capitol Broadcasting Company, said Friday that the companies are not making progress in their negotiations.

CBC stations – WRAL, the local NBC affiliate, and WRAZ, the Fox affiliate – have been off AT&T U-verse since Sept. 13, thanks to a contract dispute over retransmission fees.

This week, AT&T’s vice president of content and programming, Linda Burakoff, sent a letter to WRAL’s vice president and general manager Steve Hammel, urging the stations to restore its signals to AT&T so that viewers can watch ACC and NFL football games and the World Series. The News & Observer also received a copy of that letter.

“We formally request that WRAL, WRAZ and Capitol immediately return WRAL and WRAZ to all U-verse customers living in the Raleigh region for, at minimum, the duration of these teams’ upcoming games as we work together behind the scenes to end this impasse,” Burakoff wrote.

But Goodmon says not only has there been no progress in their negotiations, CBC can’t contractually just turn on the signal for sports games.

“I don’t want to give the impression we’re making progress,” Goodmon said. “There has been no positive movement happening.”

A dispute over fees

The FCC mandates that cable companies (or multi-system operators) like AT&T must pay stations like WRAL retransmission fees for the rights to broadcast their content. They pay these fees to larger media companies as well. The cable companies then pass those costs to the consumer.

According to AT&T statements, customers are charged $5.60 per month to receive local NBC, CBS, ABC and Fox affiliates. AT&T pays “carriage fees” to each local affiliate to be able to carry their channels, and that is what the current dispute with Capitol Broadcasting is about – the amount that AT&T should have to pay them.

Goodmon says the increase in fees requested by Capitol is the market rate his company needs to pay the fees required by NBC and Fox. Goodmon insists that his company’s requests are “in line with our last deal with AT&T” and notes that CBC has negotiated deals with five other cable providers in the past 10 months, and that all have been resolved successfully.

“We’re not pushing for things that are unreasonable,” Goodmon says. “It’s not about greed, it’s about survival.”

According to industry reports, AT&T U-verse has an estimated 20,000-30,000 subscribers in the Raleigh market, compared to about 500,000 Spectrum subscribers, 200,000 DirecTV subscribers and 100,000 DISH subscribers.

Viewers are frustrated

Meanwhile, local viewers remain frustrated by the outage – angry at Capitol, Goodmon admits, but also frustrated by AT&T’s confusing discount policy and by what they consider the company’s lack of effort in retaining unhappy customers. Many customers report having purchased HD over-the-air antennas to get broadcast networks. (Capitol reportedly gave away 4,000 Mohu antennas earlier this month.) Some customers switched cable providers or cut the cord entirely.

AT&T, which owns DirecTV, recently reported to the SEC that it lost 390,000 net video subscribers in the third quarter this year. During a conference call with analysts this week, AT&T Chief Financial Officer John Stephens said the migration of U-verse customers to DirecTV and DirecTV Now (a streaming service) “is something we intended.”

Goodmon says the current outage is not something he is happy about, but he’s also bracing for a long fight.

“I want to get a deal more than anybody I know,” he says. “But the reality of the situation, as I see it today, is we’re a long way off. I don’t see it coming together anytime soon without massive movement on their side.”

This story was originally published October 27, 2017 at 5:25 PM with the headline "It looks like there’s no end in sight for U-verse-WRAL stalemate."