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FCC Fines TV Stations for ‘Bad Faith’ Retrans Negotiations

FCC
(Image credit: FCC)

The FCC has upheld a decision to penalize 18 TV stations it claims engaged in “bad faith” negotiations with AT&T’s DirecTV satellite service, fining the stations $512,228 each for a total nearly $9 million. In doing so, the commission was sticking to its original claim made last year that the Sinclair-managed stations were “unreasonably delaying retransmission consent negotiations...and failing to respond to AT&T’s proposals for the retransmission of the Defendant Stations.”

In September  2020, the FCC  announced its decision to fine the stations $10 million in total for its actions, and subsequently denied their appeal, which was made on behalf of eight station groups: Deerfield Media, GoCom Media, Howard Stirk Holdings, Mercury Broadcasting, MPS Media, KMTR Television, Second Generation of Iowa and Waitt Broadcasting.

AT&T’s complaint was originally filed in June 2019, claiming that the stations, which were being represented by Duane Lammers of Max Retrans—refused or “unreasonably delayed” retransmission consent negotiations; failed to respond to proposals, including with the reasons for the rejection of proposals, and breached confidentiality.

“The Bureau noted that any one of those violations on its own would be sufficient to support its finding, and held that negotiating jointly does not excuse any member of that joint negotiation from its individual obligation to comply with the good faith obligations of the statute and the Commission’s rules,” the commission said.

The FCC originally wanted to fine the stations $7,500 each day it continued to violate the commission’s rules on good faith negotiations but later adjusted this amount down to $512,228—the statutory maximum under its rules. 

The following may be attributed to an AT&T spokesperson:

“We applaud the FCC’s action today imposing the statutory maximum penalty on broadcast stations who deliberately violated the Commission’s good faith negotiation rules, causing lengthy and unnecessary TV blackouts that harmed the public. These practices hold U.S. consumers hostage and we are hopeful that today’s ruling sends a strong message to broadcasters to knock off this anti-consumer behavior.”

The American Television Alliance, a lobbying group seeking to change rules regarding retransmission consent, also applauded the commission’s decision.

“ATVA applauds the FCC's decision to fine stations associated with Sinclair nearly $9 million for violating the good faith negotiation rules,” said ATVA spokesperson, Jessica Kendust. “The FCC found that these stations and their agent, Duane Lammers, engaged in conduct that merited the maximum penalty allowed by law. We are pleased that the FCC’s action sent such a strong signal that it will not tolerate broadcasters' bad-faith conduct, especially when their behavior leads to needless TV blackouts that are harmful to American consumers. “

Tom Butts

Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Technology (www.tvtechnology.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.