The kids are despondent. They want their MTV. Unfortunately, there is no MTV in Mudville at the moment because two much bigger kids, Viacom and EchoStar Communications, can't agree upon business terms. And not only is MTV missing--so are Comedy Central, Nickelodeon, VH1, BET and Noggin, along with about sixteen Viacom-owned-and-operated CBS stations in major cities across the U.S.

It's Tuesday, March 9, and the management of EchoStar, operator of the popular Dish Network satellite TV service, has decided to pull Viacom's offerings due to a pricing dispute. So, for a few days, all those Viacom stations were gone from Dish. Viacom apparently wanted an additional six cents per subscriber per month for its programming; EchoStar said that Viacom was "demanding rate increases nearly four times the rate of inflation." Viacom's own spokespeople responded by saying that Viacom programming is viewed by more than 20% of the American TV viewing public and accounts for about one-twentieth of Dish Network's revenue.  EchoStar agreed to credit subscribers $1 per month, which is nowhere near 5% of my Dish bill!

On the Dish Network Web site, EchoStar reminded us that "companies (pay) big money for you to see their commercials. Let them know Viacom has prevented you from seeing their advertisements." The irony is not to be missed: Dish Network is one of the largest purveyors of PVR devices--which most people use to skip the commercials! 

Viacom and EchoStar settled their squabbles on March 11. This situation would likely never have even happened in Europe, where the European Commission (EC) developed a framework of regulations for its emerging information society that treats all communications service providers as common carriers. In June of 1990, the EC issued a directive (90/388/EEC) regarding "competition in the markets for communications services," which recognized that the granting of special rights to one "undertaking" restricts the rights of others, which the EC considers to be unfair. It then mandated that networks had to be open to carry programming from anyone that wants to offer it. Subsequently, through the 1990s the EC issued similar subsequent rulings that dealt specifically with cable, satellite and mobile communications.

If the U.S. had such a common carrier approach, requiring all communications carriers--not just telecoms but also cable, satellite et al--to negotiate carriage with content and service providers, problems like this would probably not occur. But alas, a true common carrier environment probably has a snowball's chance of happening in the U.S., what with the environment that produced the UNE-P decision of 2003 allowing U.S. telecom carriers to build new broadband networks without having to share them under the provisions of the Telecommunications Act of 1996.

The current FCC sees competition as being between cable, satellite and telecoms, not among multiple service providers within each type of network service provider. Those agreeing with such a perspective may judge the EC's actions to be "socialist" or "anti-competitive." But what does one say now that millions lost some of their favorite programming, even if temporarily, due to a business dispute? 

MTV and BET may not be vital to the grand scheme of life, but CBS is where many turn for the latest information about their world. In this light, the Viacom/Echostar dispute shows us that media companies are so powerful--and the media industry so concentrated--that one deal can actually cut off millions of Americans from what the U.S. Supreme Court termed in 1945 to be "the widest possible dissemination of information from diverse and antagonistic sources...essential to the welfare of the people." That is a problem!

Of course, the other recent tremor in the media business occurred when Comcast made a bid for the Walt Disney Company. From Comcast's point of view, Disney would add immense value to the company. From Disney's point of view, the Comcast offer isn't big enough. Fortunately for Comcast's subscribers, the Mousketeers have not picked up their marbles (which include ABC, Disney's TV and movie programming, and ESPN) and gone back to Burbank.

Once again, occurrences relating to the ongoing consolidation of the media point to the vulnerability of the telcos with respect to the triple play, particularly those telcos that have partnered with Dish. I'd bet that their customer service reps are getting questions that they weren't exactly trained to address! And once again, we can see just how big an impact a single business deal can have.

I actually missed hearing MTV's familiar and occasionally melodic tunes coming through the floor from our entertainment system downstairs last week. Anything but the sound of the music industry's piracy police breaking down the front door because my boys were listening to music from the Internet!

Steve Hawley is principal consulting analyst of Advanced Media Strategies. He may be reached via his Web site: www.tvstrategies.com.