See updates to these developments at the end of this post.
The National Cable Television Cooperative (NCTC) yesterday sent a letter to Viacom CEO Phillippe Dauman asking him not to black out small cable companies while negotiations continue between the content provider and the NCTC.
The NCTC negotiates deals with content providers on behalf of several hundred of the nation’s small cable companies that are members of the American Cable Association. The NCTC’s contract with Viacom is scheduled to expire at 11:59 tonight and Viacom has a history of pulling content from pay TV providers when that situation occurs.
Several NCTC members last week told local media outlets that the pricing Viacom asking for is too high and that the cable companies would have to raise prices to end consumers to an unacceptable level in order to cover the increased costs.
Viacom operates several popular cable channels including Nickelodeon, MTV, Spike TV, Comedy Central and others.
In last night’s letter the NCTC said that progress on negotiations has been made over the last several days, and that both teams have been working together diligently every day.
“As difficult as these negotiations have become, NCTC is committed to staying at the table for as long as necessary to reach an agreement that is fair to our customers, most importantly, and also to both of us,” wrote Rick Fickle, president and CEO of the NCTC in the letter.
“As long as we both remain committed to reaching a deal, we urge you not to put customers in the middle by either turning your networks off, requiring local cable operators to remove their Viacom channel or blocking consumer access to online content generally available to the public,” added Fickle. “Let’s both pledge to put the public first.”
Fickle noted that a blackout by Viacom would impact 5.2 million consumers in small towns and rural communities across the country.
“It would be unfair to deny them access while we are working around-the-clock to try to finalize an agreement.
Action by the FCC today suggests regulators are growing increasingly unsympathetic toward companies that provide content to pay TV providers as content costs continue to climb steeply. The commission today ruled that broadcast TV stations in the same market may not jointly negotiate contracts with the pay TV providers that are required to carry content provided by those stations.
The FCC also is considering allowing pay TV providers to obtain broadcast network programming from broadcasters outside of a local market, which would give the pay TV providers greater leverage in negotiation with the local stations.
Update – April 1: A spokesman for the NCTC told Telecompetitor this morning that Viacom and the NCTC are continuing to negotiate and while they do, Viacom is not blacking out rural cablecos that get Viacom programming through the NCTC.
Update 2 – April 1: A deal has been reached between NCTC and Viacom avoiding a blackout. Read Viacom NCTC Deal Reached, Avoiding Rural Cable Blackout for the details.