This is what we’ve been talking about: If the networks want to stop Dish’s AutoHop (which unfairly only works on the broadcast networks’ time-shifted programming), then either don’t renew retransmission consent or get the existing deals terminated. That’s exactly what the brass at CBS have decided to do, and we pat them on the back. The latest court papers are the latest salvo in the specific war between Dish and CBS. Just this week, Dish released an ad that slapped CBS Corp.’s CNet for not allowing Dish’s “Hopper with Sling” to win its “Best of Show” award at CES. It was disqualified.
It will probably be approved by the judge, too, because CBS is rightly claiming that Dish concealed facts about the Autohop during 2011 retrans negotiations. According to the filing, during the 2011 retransmission negotiations, the parties discussed Dish’s existing and future systems, services and features. AutoHop was not part of the conversation.
On 1/23, in a lawsuit where Dish has asked a New York federal judge to declare its technology legal under copyright law, CBS is asking the judge’s permission to file new counterclaims, reports The Hollywood Reporter: “The new claims add a cause of action for fraudulent concealment. CBS says it learned during the litigation more about what Dish allegedly hid during 2011 negotiations for a new retransmission agreement. According to the network, Dish knew that it was planning on launching the AutoHop but ‘deliberately chose to conceal this fact from CBS’.”
CBS adds, “Had Dish disclosed during the negotiations the material facts that it had developed AutoHop and intended to provide its subscribers with AutoHop, CBS would not have entered into the Retransmission Agreement on the terms set forth in the current agreement.”
As part of the relief now being requested, CBS says it is entitled to rescission of the retransmission agreement or damages caused by the concealment. This is a step above the relief requested in the original lawsuit back in May where CBS merely sought an injunction prohibiting further infringement of its copyrights. If successful, CBS could theoretically have its deal with Dish voided, potentially blacking out its network on Dish’s system and forcing Dish back to the negotiating table.
The papers quote a December 16, 2011 email from CBS EVP Marty Franks to Dish executive David Shull that allegedly made it clear that CBS was not “looking to have this arrangement include new businesses that DISH may choose to enter into in the future, whether they be Netflix-like businesses, new mobile services, or other new platforms.”
CBS says that put Dish on notice, and that at a negotiating session in Denver two days later to discuss final terms, Dish didn’t disclose that it had developed the AutoHop nor made any reference to existence of such a system.
Another lawsuit from Fox Broadcasting is proceeding in California. After a judge there denied a preliminary injunction, Fox appealed the ruling up to the 9th Circuit. The appeal is pending.
See The Hollywood Reporter story here.
RBR-TVBR observation: Of course CBS wouldn’t have done the deal if it had known AutoHop was going to be part of the picture. Now, simply put, the other broadcast networks—ABC, Fox, NBC—should file their own suits or amend existing litigation that has the same wording. We bet AutoHop was not disclosed to them, either. AutoHop is unfair to the broadcast networks and this the way to stop it. Perhaps Dish will settle out of court with the networks and put this mess to rest.
Let’s imagine that all the networks pull their programming from DISH, not just CBS. That gives DISH an incentive to pull an Aereo and offer the local programming from the pulled networks through a rooftop antenna. The DISH installers can install the antenna at the same time they are installing the little dish on the houses and incorporate all the local channels into their box. There would undoubtedly be more litigation but unless the Supreme Court reverses itself in the Betamax rulings from the 80’s then Aereo and DISH should be fine. DISH could stop paying the retrans fee and presumably pass along those savings.
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