When it comes to retransmission consent disputes, a broadcast TV station ownership group founded 28 years ago by Chairwoman Nancie Smith and her late husband, David Smith, and led by President Dennis Thatcher has in recent years seen some of the thorniest of negotiations. This led Mission Broadcasting to engage in bitter fights over carriage fee agreements with direct broadcast satellite service provider DirecTV, and the parent of the Xfinity broadband and cable TV services arm of NBCUniversal parent Comcast Corp.
Both DirecTV and Comcast went to the FCC to independently address their view that Mission’s retransmission consent discussions were unfairly being led by a company it enjoys a shared services agreement with — the nation’s No. 1 owner of broadcast television stations.
Now, the Commission has reviewed the Comcast complaint and has taken the MVPD’s side in the fight by issuing a hefty Notice of Apparent Liability for Forfeiture to Mission — agreeing with the MVPD giant’s contention that it failed to negotiate a fresh carriage deal “in good faith” as it relates to The CW affiliate serving the New York Tri-State Region.
Given the Media Bureau’s belief that Mission failed to engage in good faith retransmission consent discussions, a proposed forfeiture in the amount of $150,000 has been levied against the company.
The fine, which Mission can pay or fight with a request to reduce or eliminate the penalty, comes after Comcast on December 12, 2022, submitted to the Commission a “verified complaint” against Mission and its shared services partner, Nexstar Media Group, “for failure to negotiate retransmission consent in good faith.”
The entire complaint was taken into consideration, with queries made by Media Bureau Chief Holly Saurer and her team at the Commission. The forfeiture notice released late Friday, ahead of the Dr. Martin Luther King, Jr., holiday, is focused, however, on a subset of the allegations against Mission — all focused on its retransmission consent negotiations associated with WPIX-11 in New York. The NALF does not address any of Comcast’s allegations against Nexstar … yet. While the FCC makes it clear that it is Nexstar, and not Mission, that handled the retransmission consent negotiations on its behalf with Comcast, the Media Bureau continues to review the remaining allegations involving Nexstar. As such, a second forfeiture notice could be in the works, once ongoing investigations by the Media Bureau conclude.
A CABLE TV TILT AT THE COMMISSION?
When it comes to retransmission consent battles and the “blackouts” of television stations by MVPDs, the FCC under Jessica Rosenworcel has taken an aggressive stance in what it believes is protecting consumers by stepping in to a fight that has traditionally seen highly charged barbs flung by either party and lots of finger-pointing and blame.
In late December 2023, the Commission agreed to establish a Notice of Proposed Rulemaking that would require notification to the Commission when a “blackout” of a broadcast television station, or stations, occurs on a video programming service offered by a multichannel video programming distributor (MVPD) for 24 hours or more due to a breakdown in retransmission consent negotiations between broadcasters and MVPDs. The NPRM got a “yes” vote from Republican Commissioner Nathan Simington, but with reservations.
Meanwhile, section 325(b)(3)(C)(ii) permits the Commission to establish rules that “prohibit a television broadcast station that provides retransmission consent from . . . failing to negotiate in good faith.” To best determine when good faith negotiations are not present, a 2000 Order cemented a two-part test. First, an objective list of negotiation standards for “negotiating entities” — a broadcast TV station or MVPD — was codified. Second, consideration of whether a broadcast TV station or MVPD failed to negotiate in good faith based on the “totality of the circumstances” was established. That standard opened either party up to filing a complaint with the Commission.
When adopting this standard, the Commission explained that specific retransmission consent proposals could be “sufficiently outrageous … as to breach [the] good faith
negotiation obligation.”
Fast-forward to mid-October 2022. While DirecTV, by law, began its own bitter and protracted dispute with Mission over the failure to reach a fresh retransmission consent agreement, WPIX on October 28, 2022, sent Comcast an initial proposal for renewal for retransmission consent of The CW-aligned station. No agreement could be reached prior to Dec. 3, 2022, resulting in Xfinity dropping WPIX-11 from its systems in the Tri-State Area. While Optimum and Charter Communications’ Spectrum are the dominant MVPDs in New York, Xfinity is a key MVPD in Northern New Jersey.
Then came two proposals, made on December 7 and December 9, 2022, that are the focal point of the Commission’s concerns. “These proposals would have, in relevant part, prevented either party from seeking Commission action related to certain carriage negotiations,” Saurer lays out in the “Factual Summary” of the NALF. On December 12, 2022, Comcast moved forward with the complaint.
Saurer and the Media Bureau went to work. By isolating Comcast’s complaint against Mission Broadcasting to WPIX, a former Tribune Broadcasting property that served as its New York flagship, the Media Bureau honed in on two assertions from the MVPD giant — that Mission breached its statutory duty to negotiate in good faith, and that Mission did so by conditioning retransmission consent on Comcast’s acceptance of contract proposals that were presumptively inconsistent with competitive marketplace considerations because they would foreclose the filing of future complaints with the Commission.
Saurer’s conclusion? “Comcast has satisfied its burden of proof with respect to Mission’s failure to negotiate in good faith.”
WHAT’S AHEAD FOR NEXSTAR?
With Saurer’s determination in the Memorandum Opinion and Order released late in the day on January 12, it is now up to Mission to pay up or fight — even as a successfully executed retransmission consent agreement absent of the disputed terms presented on December 7 and December 9 by the licensee to Comcast was agreed to. Could Mission simply assert that it is not responsible for actions taken by Nexstar on behalf of WPIX? Nope … it already did. As Nexstar was identified by Mission as “the approved delegated negotiator for retransmission” of WPIX, Saurer said, “Not only does this argument contravene basic principles of agency law, it also ignores Commission precedent that licensees are ultimately responsible for the acts of their licensed stations.”
Meanwhile, what could be in the works for Nexstar could also be big, when it comes to a potential financial penalty? Saurer noted that Nexstar “does not dispute that it made the proposals identified by Comcast when negotiating as the representative of WPIX, or that those proposals would have foreclosed the filing of certain complaints with the Commission.”
Rather, it argued that “releasing FCC-related claims or withdrawing FCC complaints is not novel,” and “parties typically agree to withdraw good faith negotiation complaints once retransmission consent agreements have been reached.”
Saurer’s answer to that statement from Nexstar? “We find these arguments unpersuasive.”
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