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Houston Cable Operator Fined $2.25 Million on Retrans Violation

WASHINGTON — Regulators have levied a $2.25 million fine against a Houston cable TV operator for violating of retransmission consent rules. The Federal Communications Commission’s Media Bureau found TV Max Inc., dba Wavevision, was carrying the signals of six TV stations without permission.

“The commission found TV Max’s violations to be very serious, warranting a substantial penalty, given the longstanding unauthorized carriage that continued even after the Bureau warned TV Max about its actions,” the fine notice stated.

TV Max is described as a cable operation that serves more than 10,000 subscribers in 245 apartment buildings in the Houston market. Thomas M. Balun, Eric Meltzer and Richard Gomez are listed as the controlling parties of TV Max and related companies. Balun is listed as the CEO.

The six stations involved include KTXH-TV, a MyNet owned by Fox; Fox O&O KRIV-TV; Univision O&Os KXLN-DT and KFTH-DT; KPRC-TV, the NBC affiliate owned by Post-Newsweek Stations; and ABC O&O KTRK-TV.

The commission said that during the 2012-14 carriage cycle, all of the stations elected retrans with TV Max, which previously had retrans contracts in place with each. The contracts with Fox, Univision and Post-Newsweek expired Dec. 31, 2011; the one with ABC expired March 2, 2012. TV Max continued to carry the stations without extensions or renewals, the commission said. The stations consequently filed complaints with the FCC.

TV Max argued that it did not need broadcaster consent to carry the signals because its operation fell under the definition of a master antenna television facility. The commission’s “MATV exception” provides that in limited circumstances, “cable operators do not need broadcasters’ consent to retransmit broadcast signals to building residents when the signals are received by master antenna television facilities,” the notice said.

While TV Max was in the process of converting its buildings to master antenna systems, only half were completed by Jan. 1, 2012. The rest were being supplied by an off-site cable headend, making the operation subject to retransmission consent, according to the notice.

In mid-December, the Bureau determined that TV Max “admittedly had retransmitted broadcast signals without consent before having installed MATV systems on all of its [multi-dwelling unit] buildings, and that even after installing MATV systems, TV Max’s method of providing broadcast signals to MDU residents did not fall within the MATV exception. In particular, the Bureau referred to TV Max’s admission that “broadcast signals are delivered to MDU residents using both the fiber ring and the MATV systems.”

Max TV was ordered to cease carriage immediately, but a follow-up investigation on March 28, 2013 revealed it had not. TV Max responded that it had stopped carrying the stations via the fiber ring 10 months earlier, but the commission found this to be contrary to testimony in the record. The commission said that as of Dec. 20, 2012, Balun confirmed signals were still being transmitted over the fiber ring. The company later said it did not own the fiber ring by that time, but the commission found that TV Max has “simply assigned [it] to related companies in an effort to evade responsibility for its ongoing violations.”

The commission further noted that TV Max would continue to be in violation of retransmission consent law if it transmitted signals “by means of a fiber ring, or any means other than a master antenna… whether or not they own the fiber ring.”

TV Max has 30 days to respond.FCC Chairwoman Mignon Clyburn and Commissioners Jessica Rosenworcel and Ajit Pai all signed off on the fine.