October 17, 2017 / 9:34 PM / a year ago

Univision appeals to regulator after Verizon pulls the plug

Oct 17 (Reuters) - Spanish language broadcaster Univision Communications Inc has sent a letter to the U.S. media regulator lambasting Verizon Communications Inc for pulling its networks from 4.7 million of its customers on Monday without warning.

At 4:59 pm on Monday, two minutes before Univision's carriage deal with Verizon was set to expire, Verizon pulled Univision's channels from its fiber optic network service, called FiOs, and wireless platforms, the letter said.

Verizon also refused to sign a contract extension that would have kept the networks on the air, according to the letter, which was sent by Univision chief executive Randy Falco to Federal Communications Commission Chairman Ajit Pai on Tuesday and viewed by Reuters.

"In my 40 plus years in the business, I have never seen a distributor so precipitously reject an extension and abruptly cease negotiating with a broadcaster," Falco wrote in the letter. "Verizon should resume good-faith negotiations immediately."

The letter did not specify what action Univision wanted the regulator to take.

A Univision spokesman declined to comment. Requests for comment to the FCC and Verizon were not immediately returned.

In a statement on its website, Verizon told customers that Univision was asking for an "excessive price increase".

"While some customers are relying on coverage of the recent natural disasters in Puerto Rico and Mexico, Univision is proposing an increase of more than double what they charge for access to their channels today," it said.

Negotiations between pay-TV operators and programmers have become increasingly difficult as more viewers become "cordcutters," opting to watch their favorite shows online.

Six of the largest U.S. pay-TV providers lost a total of 723,000 subscribers during the second quarter.

Viacom Inc and Charter Communications are still in negotiations over a contract that was initially set to expire on Sunday evening.

Viacom, whose networks include Comedy Central and MTV, have warned the 16.6 million subscribers of Charter's Spectrum service that they could lose the channels.

And earlier this month, Walt Disney Co and cable operator Altice USA finalized a multi-year programming agreement, following contentious negotiations.

However, it is unusual for a programmer to have its networks taken off the air without any warning.

"You have entered a period where video subscribers to the bundle are falling and bundles are getting smaller and advertising is under pressure," said Rich Greenfield, an industry analyst with BTIG.

With the strain on the business model, it was easy to see how renewals were becoming more contentious, he added. (Reporting By Jessica Toonkel; Additional reporting by David Shephardson in Washington DC, Editing by Rosalba O'Brien)

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