FCC Refuses to Freeze AMC's AT&T Deal

Better Call Saul - Publicity still 2- H 2020
AMC

The Federal Communications Commission isn't particularly alarmed by the prospect that for some TV watchers, shows like The Walking Dead, Better Call Saul, and Killing Eve could be going away. On Monday, the FCC's Media Bureau denied AMC's request for a standstill order to preserve its current program carriage agreement with AT&T. As a result, upon the imminent expiration of the deal, AMC could go dark on AT&T platforms including DirecTV and AT&T TV Now. At the moment, that accounts for a quarter of AMC households.

On Aug. 5, negotiations between the companies reached such an impasse that AMC filed a complaint with the FCC that accused AT&T of doing what it said it wouldn't during the Time Warner merger. Specifically, AMC said AT&T was using its bargaining leverage as a vertically integrated MVPD to disadvantage unaffiliated, independent programming networks by demanding anticompetitive program carriage terms. AMC was upset that AT&T was pouring money into HBO but wouldn't agree to much of a fee hike for AMC. Additionally, AMC objected to the online distribution restrictions that AT&T was apparently insisting upon.

The merits of the complaint haven't yet been adjudicated, but to preserve the status quo, AMC wanted the FCC to order a freeze.

The FCC won't agree to such a thing because it doesn't see irreparable harm.

"Unfortunately for AMCN, its irreparable harm argument was breaking bad at the outset because AMCN misconstrued the relevant inquiry," writes Media Bureau Chief Michelle Carey. " Should we deny AMCN’s request for temporary injunctive relief, the alternative under the status quo would be a temporary service disruption pending resolution of AMCN’s Complaint. To be sure, AMCN could decide instead to accept AT&T’s latest carriage offer. But taking such a step would be AMCN’s choice entirely, and we fail to see how AMCN can base its case for injunctive relief on harms that would flow solely from its own decision to accept AT&T’s offer, harms that it can avoid by not agreeing to that offer."

In her show title-butchering order (see here), Carey then moves to the question of whether irreparable harm arises from AMC accepting AT&T's proposal.

"Once we cross that Rubicon, most of AMCN’s irreparable harm case halts and catches fire. For example, we will not issue a standstill order to prevent harms that allegedly would result from AT&T’s proposed [REDACTED] Simply put, AMCN does not need a standstill order to avoid those harms. Rather, it can decline AT&T’s carriage offer and experience a temporary service disruption while its Complaint is being considered by the Commission."

A footnote adds that upon the expiration of the agreement, AMC would have "greater latitude to explore other modes of distribution for its content."

Commenting upon the development, AMC tells The Hollywood Reporter, "While we are disappointed the FCC didn’t immediately intervene in our ongoing negotiations with AT&T, our broader carriage complaint remains pending and we look forward to a favorable resolution at the conclusion of the process. As an independent programmer, we are simply asking AT&T to not use their size and scope to competitively disadvantage our business and our programming, and to treat our networks fairly and in the same manner they treat their own services and networks like HBO Max, HBO, CNN, TNT, TBS and TruTV. We have had a long and successful partnership with AT&T that we hope will continue for years to come."

An AT&T spokesperson says, "We are pleased the FCC correctly denied AMC Networks’ petition for a standstill order. We treat all programmers fairly and AMC Networks’ petition and complaint are without merit. We remain willing to work with AMC Networks to provide its content at a reasonable price for our customers."