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Comcast (CMCSA) Embroiled in Spanish Channel Dispute

Comcast Corp.CMCSA – the largest cable MSO in the U.S. – has been charged for discriminating against Spanish channel Estrella TV and making unjustified demands for carrying it on its network in Denver, Houston and Salt Lake City region. The move supposedly favors Comcast-affiliated Telemundo and NBC Universo channels. Liberman Broadcasting, the owner of Estrella TV, filed a complaint with the Federal Communications Commission (FCC) relating to the issue. Estrella TV is touted as a rising star by Liberman in the Spanish language segment, further validated by its solid Nielsen ratings. Meanwhile, this is a vital issue as both the companies are striving to consolidate their position in this media segment owing to the growing count of Hispanic viewers.

Comcast’s Defense

As per FCC rules, a cable operator cannot choose its own channels over others. However, Comcast pointed out that such anti-discrimination rules do not apply to broadcasters like Liberman. The cable giant added that Liberman had lifted the Estrella TV channel off particular markets while maintaining the service in other parts of the country. Additionally, Comcast stated that the fees demanded by Liberman are too high keeping in mind the channel’s limited appeal. Further, Comcast rated the performance of Estrella TV as weak without citing any significant negative customer reaction.

The Bottom Line

Blackouts related to carriage pricing disagreements have now become common within the pay-TV industry, with some deadlocks running into weeks or even months. This dispute follows the recent spat between AT&T Inc. T and Grupo Televisa, S.A.B. TV-owned Univision. Moreover, Comcast-owned NBCUniversal faced similar issues last month with DISH Network Corp.DISH. However, Liberman’s present stance and the outcome of similar complaints hint at no adverse impact for Comcast just yet.

Comcast currently carries a Zacks Rank #3 (Hold).

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