Mediacom Seeks FCC Review of Retransmission Consent Case
Mediacom continued to press its case against Sinclair at the FCC in filings late last week. Sinclair and Mediacom agreed Nov. 30 to try to work out a carriage deal by Jan. 5, a decision made hours before Mediacom’s contract to carry Sinclair stations was to expire (CD Dec 4 p9). With a few weeks to forge a deal, Mediacom returned its attention to an emergency retransmission complaint it filed in Nov. against Sinclair. Meanwhile, the NAB told the Commission it shouldn’t step in.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The Commissioners, not the Media Bureau, should decide if Sinclair negotiated in bad faith, Mediacom said in a motion filed Dec. 8. The Media Bureau should decide only routine retransmission consent matters; since the matters raised in Mediacom’s complaint are so new, only the full Commission can rule on them, Mediacom said.
Mediacom said its complaint raises new questions about: (1) Sinclair’s arrangement with DirecTV, which through direct-response and print ads is paying Sinclair $150 for every new subscriber Sinclair helps sign up. (2)Sinclair’s “attempt to undermine confidence” among investors in Mediacom’s financial stability by “making false and misleading statements… to the investment community.” (3) Commission criteria for finding marketplace conditions competitive. “Given the absolute absence of any relevant commission precedent or guidance on the specific factual, legal or policy matters raised by Mediacom’s complaint, it would be a clear error for the Bureau to act… on delegated authority,” Mediacom said.
Mediacom attorneys sent DirecTV 2 cease & desist letters calling the ads deceptive. And in sales calls DirecTV customer-service workers misled Mediacom subscribers by “falsely stating that ‘Mediacom is going out of business,’ and that ‘Mediacom can’t afford to pay to carry [Sinclair’s stations],'” Mediacom outside counsel Bruce Beckner said in one letter. In the other, Beckner threatened to forward DirecTV’s response to Ia.’s attorney general, “who is currently investigating this advertisement,” reminding DirecTV that Iowa law allows single-party consent to record phone conversations. Mediacom filed a complaint with the Ia. AG and the office followed up with Sinclair, as is standard protocol, said Ia. Dir.-Consumer Protection Div. Bill Brauch. “We don’t have an investigation under way,” he said: “I wouldn’t describe it as such, and I didn’t describe it as such to Mediacom.”
Other cable operators don’t pay Sinclair as much for carriage as Sinclair has led investors and the public to believe, Mediacom CEO Rocco Commisso said in a Nov. 20 letter to Sinclair CEO David Smith included with Mediacom’s FCC filing. Sinclair has touted its success extracting cash fees for carriage of its signals, but such payments often take the form of advertising buys from the cable operator, Commisso said, citing Sinclair Gen. Counsel Barry Faber’s statements during negotiations. “A significant part of the consideration in already signed contracts, including those with Comcast and Insight, include [sic] payments for advertising to be purchased on the Sinclair stations by the MSOs and other agreements which involve an exchange in property by Sinclair for cash, rather than cash simply for retransmission consent,” Commisso wrote. Sinclair didn’t comment. Meanwhile a U.S. Dist. Court, Des Moines, judge gave Sinclair until Dec. 28 to answer Mediacom antitrust allegations (CD Oct 10 p5).
The FCC shouldn’t step in, NAB Exec. Vp-Legal & Regulatory Affairs Marsha MacBride said in a Dec. 8 letter to the Commission. “The Commission here and in general should not intervene in free negotiations between private parties,” MacBride said: “The process of marketplace negotiations is working as intended and should be allowed to continue working without intervention by government.”