As the deal is about to be sealed for the AT&T/DirecTV merger, there are still a few hurdles remaining. One is a group of smaller and mid-sized cable companies seeking to have limits placed on how much the new AT&T/DirecTV consortium can charge them for their regional sports networks.
DirecTV owns and operates four RSN’s under the Root Sports banner across the country. The markets where Root Sports call home are in Pittsburgh, Seattle/Portland (Northwest), Houston (Southwest) and Denver (Rocky Mountain).
Under the guise of the American Cable Association, the 27 cable operators wrote a letter to the Federal Communications Commission expressing their concern that the new company will raise the per subscriber cost or carriage fees for Root Sports.
The ACA noted that all of the Root Sports RSN’s are “must-have” channels carrying live sports programming and they want to ensure that the AT&T/DirecTV won’t use that notion for higher gain and impose higher fees on the cable operators.
The letter states as follows:
“From experience we know we must offer RSN programming in order to retain and attract the subscribers necessary to justify our investments in our broadband networks and to have sufficient capital to continue to invest in deploying broadband in the future.”
So as the FCC gets closer to signing off on the merger, it knows it has a few issues to consider before the final approval is given. Cable operators know that they don’t want a dispute that leads to a blackout of any of the Root Sports networks and they hope to nip any potential problems in the bud before they occur.
We’ll see if this move by the smaller cable companies will work or fall on deaf ears at the FCC.