Communities' Involvement in Charter/Northwest Blackout Fight Seen as Unusual
TV programming blackouts often elicit statements from mayors or other elected officials urging the sides to come to an agreement. But the role El Centro, California, and other communities are playing in a carriage dustup between Charter Communications and Northwest Broadcasting is largely unprecedented, experts told us.
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To begin with, third parties typically get riled up in blackouts only when there's sports programming, particularly marquee sports programming, that's at stake, but that's not happening here, said entertainment lawyer Jonathan Handel of TroyGould. "It's noteworthy the dispute has gotten this ugly," particularly with a small operator like Northwest, he said.
El Centro and the other communities that petitioned the FCC (see 1803210031 and 1804050049) seeking an order that Charter pay refunds and unspecified penalties for the Northwest dispute might be a sign of communities trying to regain some of the leverage they once had over cable operators, Handel said. He said the FCC, being particularly business friendly, likely won't get strongly involved, even given public pressure. The outcome of the litigation -- with Charter and El Centro suing one another in federal court (see 1804260003) -- is tougher to judge, he said. El Centro; Jackson, Wyoming; and Crescent City, California, didn't comment.
The blackout is a violation of Yuma, Arizona's, recently negotiated and formalized franchise agreement with Charter that requires a 30-day notification of lineup changes, said city Public Affairs Coordinator Dave Nash. He said the Feb. 2 blackout came with a message from Charter on TV screens directing subscribers to northwestfairdeal.com, making it hard not to conclude the cable company was well aware in advance of the blackout likely coming. He said Yuma didn't file the FCC petition at Northwest's behest, and couldn't recall there being a blackout in the city's past that also violated the MVPD's franchise agreement .
Northwest CEO Brian Brady said the broadcaster didn't ask for the communities to act. "The reason they filed was more about their constituents not getting a fair deal from Charter," he said.
The FCC isn't likely to get involved unless there's a matter of public safety involved, emailed Ball State University telecommunications professor Dom Caristi. If the sole local broadcaster was blacked out and citizens had no other news source, the FCC also could get involved, he said, saying that scenario is unlikely. He said retrans battles involving over-the-air stations often get attention when they come in January, right before the Super Bowl, if residents risk missing the game. The FCC didn't comment.
The Northwest lack of carriage wasn't in Charter's control since it was Northwest that withdrew retransmission consent after refusing Charter’s offer to continue carrying the stations’ signals under the existing terms and conditions while negotiations continued, Charter said in an FCC docket 18-91 opposition posted Friday to the petitions. Charter said the advance requirement notice applies to only changes within the control of the cable operator. It said mandating refunds would be "impermissible rate regulation" since the communities aren't certified to regulate basic cable rates, while the Charter terms of service expressly say subscribers can't seek refunds in the event of blackouts. It rejected arguments its broadcast TV surcharge violates the FCC's Section 76.1619, governing information provided on subscriber bills.
Interpreting the sections 76.1603(b) and (c) rules so they require cable distributors to notify customers of potential service changes 30 days before the expiration of every programming or retransmission consent agreement is "a perverse outcome that ultimately harms consumers," American Cable Association commented. Given the hundreds of channels cable systems carry, and that some come up for renewal every year, often at different times, ACA said rules as the municipalities interpret them would have cable operators "send out an endless parade of notices" to subscribers and local authorities that most of the time "would be false alarms."
Charter's El Centro litigation should be dismissed since the operator didn't show the diversity of citizenship of the parties that would give a federal court jurisdiction, El Centro said in a docket 18-cv-00679-AJB-PCL motion to dismiss (in Pacer) Thursday in U.S. District Court in San Diego. It said the municipal code citations for not giving a 30-day notice of deleting Northwest channels from its lineup represent potentially $6,000 -- far less than the $75,000 cutoff for federal jurisdiction -- and Charter's dispute of those citations is now moot because the city repealed them. El Centro said even if the federal court has jurisdiction, it should still abstain from hearing the case and allow a state court to resolve the validity of the citations under California law. The MVPD didn't comment Friday. It has argued the municipal citations, plus El Centro's FCC complaint, were intended to force concession in the cable company's Northwest blackout; the motion to dismiss doesn't mention the FCC complaint. According to the Public Access to Court Electronic Records database, Charter hasn't filed any similar suits against other communities that have complained to the FCC about the cable company violating the 30-day notice rule in the Northwest blackout.