First of its Kind FCC Retransmission Fine Decision Sets Stage for Future Fines Against Broadcasters

The FCC has proposed fines exceeding $500,000 apiece for 18 television station licensees that were the focus of a complaint by AT&T involving negotiations for the retransmission fees that AT&T must pay to carry the stations’ content.

The new FCC retransmission fine decision could be a watershed one that establishes what is meant by the term “good faith negotiations” and as a result, could streamline future negotiations and perhaps prevent future content blackouts.

Retransmission consent fees are the fees that cable TV and other video providers must pay TV stations to carry their signal. Negotiations for those fees have become increasingly contentious in recent years, and, consequently, blackouts have become increasingly common. Blackouts occur when a video provider stops carrying a station because a contract expires before a new one is established.

FCC Retransmission Fine
The FCC initially proposed the fees for the 18 television stations late last year, but the stations filed an application for review. The FCC now has upheld its original findings.

AT&T, which offers video service under its own and under the DirecTV brand, had argued that the stations did not negotiate in good faith. In a decision adopted September 2 and released yesterday, the FCC upheld its original finding in support of AT&T. The commission again found that the 18 stations had failed to conform to three requirements for good faith negotiations, including:

• Failing to negotiate
• Unreasonably delaying negotiations
• Failing to respond to retransmission consent proposals

The 18 stations are in eight broadcast groups and all have one or more agreements with Sinclair Broadcast Group, under which Sinclair operates, programs and/or provides sales and services. All the stations were represented by the same negotiator, and although it is that negotiator that the FCC found to have failed to negotiate in good faith, the commission said the stations are the ones ultimately responsible for the negotiations.

The $512,228 fine proposed for each station is the maximum penalty for failing to negotiate retransmission consent agreements in good faith. In the new FCC retransmission decision, the commission said that it was imposing the maximum fine on every station because the violations occurred over an extended time period and “the harm to viewers is multiplied with each station that goes dark.”

The broadcasters involved include several Deerfield Media stations and several MPS Media stations, along with GoCom Media of Illinois, Mercury Broadcasting Company, Nashville License Holdings, KMTR Television, Second Generation of Iowa and Waitt Broadcasting.