Altice says it has customers' best interest in mind after threat of public hearings over carriage dispute with MSG Networks

After being threatened with public hearings, Altice USA defended its position in a lengthy response to the New York State Department of Public Service’s letter last week inquiring about its ongoing carriage dispute with MSG Networks, insisting it is looking out for its customers.

“During this dispute, we have prioritized our customers’ interests,” the company said in a letter obtained by Newsday, “including providing them with cost-neutral methods to watch MSGN on other platforms and providing non-sports fans with other video packages to lower costs for them.”

Altice said it has spent more than $10 million since Jan. 1 on helping defray the cost of alternatives to access MSG and on support staff and communications related to the carriage dispute. The company said it has had more than 1 million interactions with customers on the topic.

The response is the latest escalation in a multimillion-dollar broadcasting dispute affecting millions of customers that has now drawn the attention of New York’s governor. MSG Networks, which carries Knicks, Rangers, Islanders and Devils games, was removed from Optimum TV at 12:01 a.m. on Jan. 1, and since then the sides have not been able to resolve their dispute.

On Feb. 9, the Department of Public Service, at the behest of Gov. Kathy Hochul, sent a letter to Altice asking a series of questions, and threatened public hearings if it did not hear back within five days. In the news release, Hochul called it a “ridiculous dispute” and added “our patience has expired.”

Now the matter is in the hands of DPS as it considers its next move, if any, regarding Altice, the parent company of Optimum TV.

On Tuesday, a DPS spokesman told Newsday, “DPS staff are currently reviewing the responses submitted to date in the proceeding to determine next steps, including whether to hold public hearings on this dispute.”

The timetable for such a decision is unclear, but the clock is ticking on MSG Networks’ prime programming window, with the hockey and basketball regular seasons ending in two months.

In a carriage dispute, a programming provider such as MSGN and a distributor such as Optimum are unable to agree to contract terms, causing customers to lose access to that channel. The letter, from DPS CEO Rory Christian, asked Altice to “describe in detail what cost-neutral option(s) Optimum intends to offer to those customers impacted by this programming dispute, when such option(s) will be available, and how customers can enroll.” As an alternative, the letter asked Altice to acknowledge whether it “intends to provide those impacted customers a service credit for services they are no longer receiving.”

The Altice response, dated Feb. 13, came via a five-page letter from Chris Bresnan, Optimum's senior director of government affairs, to Brian Ossias, acting director of DPS’ office of telecommunications.

Bresnan’s letter detailed efforts to provide “cost-neutral options” to consumers such as discounts on the Gotham Sports app and fuboTV, where fans can access MSG’s games.

It also discussed options for customers who do not follow sports avidly and wish to pay less for programming tiers that do not include expensive sports channels.

The letter did not address the “alternative” question asking about across-the-board service credits of the sort MSG has called on Altice to provide.

Altice attached an exhibit illustrating the ways in which it has sought to reach customers through various communication methods and to encourage them to call customer service numbers for more information.

Some customers have received bill reductions and in some cases gift cards as an enticement to stay with Optimum TV, particularly those who have threatened to leave for Verizon Fios, a key competitor of Optimum.

Much of Altice’s letter to DPS reiterated its position that the traditional pay TV bundle is outdated and people who do not watch sports channels should not have to pay for them. But Optimum does still carry YES and SNY, MSGN’s regional sports network counterparts.

Reached on Tuesday, an Altice spokesman said the company had no further comment beyond the content of the letter.

MSG Networks released a statement on Tuesday that read, in part, "Optimum’s response to the State’s inquiry fails to answer the basic question of whether they will issue a full reduction to every customer who continues to pay for programming they no longer receive. To date, the answer is no."

The current dispute affects about one million homes in the metropolitan area, with Long Island being particularly hard hit because it has such a high concentration of Optimum TV customers.

By Neil Best

neil.best@newsday.com@sportswatch

Neil Best first worked at Newsday in 1982, returned in 1985 after a detour to Alaska and has been here since, specializing in high schools, college basketball, the NFL and most recently sports media and business.