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Gannett, Dish in dispute over fees and the AutoHop ad-skipping feature

LOS ANGELES, Calif. – A dispute over fees threatens to leave more than 2 million Dish subscribers in 19 cities without access to local television stations owned by Gannett just as the fall TV season is starting.

Dish Network Corp. claims Gannett Co. is asking for a 300 per cent increase in fees for the right to carry 22 Gannett stations affiliated with NBC, CBS, ABC and Fox. Gannett says it’s seeking a fair deal in line with market rates.

The two sides are also fighting over Dish’s new digital video recorder, the Hopper, which allows customers to automatically skip commercials from the previous night’s prime-time broadcasts. After consumers switch on the service, their playback of recorded programming from the four network broadcasters excludes the advertisements that were recorded. The ad-skipping doesn’t work for live television.

Gannett argues the technology disrupts its business model and requires higher fees to compensate it.

The companies’ existing deal expires at midnight Mountain time on Sunday. Dish has its headquarters in Englewood, Colo. Gannett, which is based in McLean, Va., owns such stations as KUSA-TV in Denver, WXIA-TV in Atlanta and WUSA-TV in Washington. The only Gannett station excluded from the dispute is one in Flagstaff, Ariz., which merely retransmits the feed of another station.

Dish CEO Joe Clayton said the complaint about the Hopper is unfounded partly because a “very small percentage” of its customers currently have one. Most local stations’ advertisements also fall outside the four hours of prime-time programming on weeknights from broadcast networks that would be impacted by the technology, he said. Dish has not enabled its auto ad-skipping service for other channels or during other times.

“They want to charge a fee for us to allow consumers to skip their own commercials,” Clayton said in an interview.

Gannett expects that use of the device will grow over time.

Starting Thursday, it began warning customers that Dish subscribers may lose access to the channels.

“Gannett has never had a service disruption with a major TV provider and we hope we do not face that situation with Dish,” Gannett said in a statement.

In June, broadcast signals from several TV stations owned by Dallas-based Hoak Media were temporarily blacked out to about 450,000 Dish subscribers in a similar dispute that Dish said was focused on the Hopper.

A federal court in New York is handling a lawsuit brought by broadcasters including CBS Corp., which argue that the Hopper technology violates its licensing agreements. Gannett is not a party in that lawsuit.