The terrestrial broadcaster MBC stopped providing KT SkyLife with high-definition content Thursday, as the two failed to narrow differences over fees for re-broadcasting MBC programs.

KT SkyLife is a satellite broadcaster affiliated to the country’s largest fixed-line telecom services provider KT Corp.

Following MBC’s move, SkyLife is now broadcasting standard-definition MBC programs for its 620,000 subscribers in Seoul and the surrounding regions.

KT SkyLife and MBC signed a real-time re-broadcasting contract for the terrestrial broadcaster’s HD programs in February 2008.

Although the contract requires KT SkyLife to pay MBC fees for re-broadcasting its HD content, KT SkyLife has been withholding payments since April 2009 citing clauses in the contract that protects its dealings with MBC from being disadvantageous in comparison with MBC’s dealings with cable and Internet-protocol television operators.

With negotiations failing to resolve the situation, MBC informed KT SkyLife on March 28 that it will stop providing HD content from April 13.

KT SkyLife had petitioned for an injunction to prevent MBC from doing so, but the petition was rejected by Seoul Southern District Court on Tuesday.

According to industry sources, MBC and KT SkyLife engaged in last-minute negotiations to prevent the situation, but they failed to reach an agreement. MBC is reported to have demanded 280 won (26 cents) per SkyLife subscriber per month for the use of its HD programs, but KT SkyLife maintained that the costs arising from such an arrangement would have threatened its survival as a viable business.

By Choi He-suk  (cheesuk@heraldcorp.com)