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Non-cable TV viewers caught in contract static

It might be time for satellite television customers to retrieve those rabbit ears antennas they bought in 2011.

The parent companies of two Medford television stations are at odds with satellite programmers DirecTV and DISH Network. FOX-affiliate KMVU's signal on DirecTV went dark at 5 p.m. Monday and CBS-affiliate KTVL could disappear from DISH at 12:01 a.m. Thursday.

The issues that kept Northwest Broadcasting Co. affiliate signals in Southern Oregon, Northern California, parts of eastern Washington and upstate New York, off the air for a month before the Green Bay-Pittsburgh Super Bowl game in February 2011 remain unresolved.

Although El Segundo, Calif.-based DirecTV and Northwest Broadcasting agreed then to give fans access, no formal deal was signed.

The can was kicked down the road — until this month.

"After 19 months, we reached a financial agreement a week ago," said Jon Rand, chief operating officer for Spokane-based Northwest Broadcasting, which operates the Medford Fox affiliate. "We came to terms with what they would pay us. But then they added terms and conditions that we think they probably knew we couldn't agree with and it blew the whole thing up."

While Northwest Broadcasting is a relatively small player, Sinclair Broadcasting Group, which acquired KTVL last November, operates 82 stations in 47 markets, reaching more than 27 percent of the nation's television households.

The agreement between DISH Network and Sinclair's group, which is based in Hunt Valley, Md., expires at 12:01 a.m. Thursday. Unless a deal is reached, it will mark the first time KTVL's signal has been withheld from a cable or satellite programmer.

"We had some tough negotiations a couple years ago, but we got them resolved before anything happened," said Kingsley Kelley, KTVL vice president and general manager.

While all but one of Northwest Broadcasting properties are FOX affiliates, Sinclair Broadcasting is connected with ABC, CBS, FOX, ABC and several minor networks.

On Monday, Englewood, Colo.-based DISH Network said Sinclair threatened to cut off programming unless the satellite company "accepts a massive price increase."

"We carry more than 1,800 local broadcast stations nationwide," said DISH senior vice president of programming Dave Shull in a statement. "(Sinclair stations are) asking for more than any other station anywhere in the country. This goes beyond pure corporate greed — it's profoundly insensitive to the needs of the public."

Sinclair responded on Tuesday, saying viewers might consider other options.

"The prices (Sinclair) is requesting for its extremely popular stations are substantially lower than the amounts DISH is paying for other far less popular channels it carries as a result of DISH's flawed economic model that on a relative basis compensates channels with little to no audience share more than the broadcast channels," said Barry Faber, executive vice president and general counsel.

He added that the dispute involves matters other than pricing and pointed out the four major networks have sued DISH because it is providing customers with technology that allows subscribers to delete commercials.

"Rather than taking DISH's suggestion to blame one party or another in these negotiations," Faber said, "Sinclair suggests its viewers would be better served by simply switching its video service to a provider."

While viewers could switch carriers, the Federal Communications Commission prohibits those carriers from providing an outside channel if that channel's offerings are the same as a local station. That means DirecTV cannot offer an out-of-the-area Fox channel locally and DISH cannot offer a different CBS channel to replace KTVL.

Kelley has received telephone calls and emails inquiring about the possible blackout for DISH subscribers.

"Fall is approaching and that means the NFL and new series kicking off," Kelley said. "The NFL is what gets people out of their chairs. The bottom line is getting fair compensation for the product you provide. When you have two companies, both trying to maximize their own position, it can get tough."

For Northwest Broadcasting and DirecTV, it got tough enough for the sides to essentially call a truce for 18 months.

Northwest Broadcasting has signed 13 agreements with other programmers during that period, Rand said.

Program carriers such as DirecTV can ask for clauses guaranteeing their price will be no higher than the best deal offered other carriers.

"DirecTV wanted a retroactive agreement (guaranteeing the price) and we told them we would agree going forward, but couldn't agree retroactively," Rand said. "I know we can't agree to what they asked us to agree to, so I know they are going to have to do the moving."

Reach reporter Greg Stiles at 541-776-4463 or e-mail business@mailtribune.com.