FCC

Diverse Groups Combine to Oppose Sinclair-Tribune

ACA will file petition to deny, says Dish will as well 8/07/2017 12:36 PM Eastern

A diverse group of associations, including the American Cable Association, as well as media consolidation opponents and conservative news outlets, are getting together to formally oppose the merger of Sinclair and Tribune, which would result in the nation's largest broadcast TV group.

That group includes a big critic of conservative media and a conservative media outlet, united in their strong opposition to the deal.

Initial comments on the merger were due Monday (Aug. 7).

Joining ACA president Matt Polka on a conference call to announce their FCC filings in opposition to the deal were former FCC chairman and Common Cause special adviser Michael Copps, One America News Network president Charles Herring, Computer & Communications Industry Association president Ed Black and Competitive Carriers Association SVP Tim Donovan.

Their issues include the group's potential power in retrans negotiations andin setting a local news agenda, as well as Sinclair's role in the rollout of the ATSC 3.0 next-gen broadcast transmission standard, which also has potential retrans negotiations implications. The group said there are effectively no conditions that would make the deal palatable.

Polka took the lead on the call. He said the group wants to protect consumers and independent news. The ACA is also filing a formal petition to deny the merger.

Copps said the deal would eviscerate local TV news and help inflict "irreparable damage." He called Sinclair the "most dangerous company most Americans have never heard of." He said the company wants to skirt ownership regulations with more "joint evasion agreements." He said the company comes with an ideology more focused on conservative points of view than "any sense of balance of deep-dive journalism."

But Herring pointed out that Newsmax, The Blaze and his One America, all conservative outlets, had issues with the deal as well. Herring also said he was concerned about Sinclair's ability to demand carriage "to be named later," which might include a competitive conservative news outlet -- though Sinclair has signaled it did not plan to turn Tribune's WGN America into a new cable news channel.

Copps said no one company should have the power over news and information a Sinclair-Tribune deal would represent. Copps said the current FCC was "absent without leave" for serving the common good.

Herring said his concern was an entity with excessive, unbalanced power. He said Sinclair already asks excessive rates for its TV stations, consuming programming budgets that prevent services like his from getting deals. He also cited the capacity issue, as well as Sinclair's purchase of Tennis Channel, which he said Sinclair then forced on MVPDs at a higher-than-market rate.

Black, with CCIA, said he had serious concerns of the Sinclair "takeover" of Tribune. He said CCIA is pro-competition and antitrust enforcement. He said it was time for a new focus.

While the web has created user empowerment, local broadcasting is still important and should not have a command and control approach that restricts diverse voices, Black added.

Donovan of CCA said his group's interest in the deal was in closing the digital divide and a smooth post-incentive auction repacking process. He said Sinclair's control of over 200 stations was key, pointing to the role of Sinclair's subsidiary, Dielectric, in the repack.

He said spectrum must be freed up for mobile broadband, and the Sinclair deal could "frustrate" that effort. Donovan said he was basing the suggestion Sinclair could delay the repack on past actions related to the process.

Polka said the ACA is also filing a petition to deny the deal because it (1) violates the law and (2) harms the public interest. He also said that Sinclair had not provided sufficient evidence of the public interest benefits, citing its three-page statement. Sinclair-Tribune would use its market power to extract higher retrans fees, Polka said, adding that Dish was planning to file a formal petition to deny.

Polka also cited so-called after-acquired clauses that will allow Sinclair to raise retrans prices for Tribune stations.

The groups were asked what the major networks think about a concentration of affiliates in the hands of Sinclair. Copps said broadcasters "love" consolidation, suggesting such concentration was in broadcasters' "bloodstreams." There have been reports Fox might move its affiliations if the deal went through.

Polka was asked why Sinclair's power was any greater than already held by the four big networks. Polka said it was unprecedented in terms of ownership and control over local markets, including duopolies and joint ownership in more than a dozen markets, though Sinclair has said it would spin off stations if required to do so. Sinclair will have to comply with the FCC rules on the books, but would not mind some rule changes and waivers to allow it to complete the deal without having to give up stations.

As to the issues with the rollout of broadcasters' ATSC 3.0 standard -- Sinclair has been a strong proponent and its Dielectric broadcast equipment subsidiary should get a lot of business out of the repack -- Polka said he had issues with 3.0 itself, not to mention combined with a Sinclair-Tribune that would give Sinclair the ability to tell MVPDs in markets reaching more than 70% of the country that they have to take 3.0 "whether they like it or not, or whether your consumers like it or not. That's a problem."

Related: FCC's Pai Says White House Has Not Contacted It About Sinclair-Tribune Deal

The proposed merger has already gotten strong pushback from some independent programmers as well as well as a friend of President Donald Trump, Chris Ruddy—CEO of conservative media news outlet Newsmax.

"I think the Sinclair merger with Tribune raises very serious concerns about competition and media diversity," Ruddy told MCN. "President Trump himself warned about the 'concentration of media power.' The Commission and public need sufficient opportunity to carefully review this precedent-setting deal."

The FCC's vote, on chairman Ajit Pai's initiative, to restore the FCC's UHF discount helped pave the way for the deal by reducing the number of spin-offs of stations that would have otherwise been required.

Back in May, Sinclair agreed to buy Tribune's 42 stations for $3.9 billion.

While the FCC has not signed off on that deal yet, it did approve Sinclair's recent purchase of seven TV's from Bonten.

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