Barbs traded over FOX blackout

COEUR d'ALENE - Programming carrier DirecTV and Northwest Broadcasting Inc., which owns and operates FOX affiliate KAYU-TV, have decided they're not going to disagree quietly while they negotiate a possible new contract.

Meanwhile, El Segundo, Calif.-based DirecTV's customers are experiencing a blackout on their Fox Network programs that started after a 10-year contract between the two sides expired Dec. 31. The National Football League playoffs start this weekend, creating more urgency to agree on a new contract.

Robert Mercer, a spokesman for DirecTV, said Wednesday the company wouldn't disclose how many subscribers are affected by the blackout in the Coeur d'Alene-Spokane market. The company doesn't disclose subscriber numbers for competitive reasons, and he didn't want to predict how long the negotiations and blackout could drag on.

Both sides say they are negotiating with the other side, but are criticizing the other of not doing so in good faith.

If negotiations are going on, viewers are crossing their fingers (perhaps an antenna or two in this case), hoping something is resolved quickly to restore FOX shows to the TV-viewing diets of DirecTV customers.

While the negotiations continue, the two sides haven't shied away from trading barbs.

Mercer said, "Northwest continues to show a callous disregard for its viewers by not lifting the blackout in its attempt to gain leverage in the negotiations. If Northwest really cares about their viewers, they should restore the channels so we can keep talks at the negotiating table where they belong."

To hear Northwest tell the story, the company says DirecTV is refusing to negotiate a deal that represents the current marketplace, and is using its market power in an attempt to force a resolution on Northwest.

Brian Brady, president and CEO of Northwest, said, "To protect their historically high profit margins, DirecTV wants the (Federal Communications Commission) and Congress to intercede in these contract negotiations and enlist the government's involvement to dictate what the broadcasters should be paid."

Brady said DirecTV is accusing Northwest of "extortion because we have asked to be compensated fairly for our licensed and copyrighted programming."

DirecTV Chairman, CEO and President Mike White said he is "appalled" by Northwest's "behavior."

"For local broadcast station owners to brazenly hold viewers hostage in an attempt to extort fees that are astronomically higher than what we pay other local broadcasters is flat wrong," White said.

White said DirecTV's customers don't want to pay a 600-percent price increase.

"On the 600 percent, without getting into specifics, that's the increase they're asking for over what we were currently paying them," Mercer said.

With no specific figures provided, the 600 percent increase couldn't be verified. Northwest disputes the number.

Brady, of Northwest, said what DirecTV fails to disclose is that it has been reselling Northwest's programming to DirecTV's customers at a markup of more than 1,000 percent.

"In order for us to continue in the broadcast business we cannot allow DirecTV and companies like them to take advantage of their size and political muscle to bully us into subsidizing their business," Brady said.

On its website, KAYU-TV said it's asking DirecTV to pay the station "a small fraction of what they receive for re-selling our signal to DirecTV customers."

KAYU said, "Over-the-air television stations, such as KAYU, spend a huge portion of their operating expenses and capital investment to provide quality over-the-air signals."