Muni Cites Retrans Abuse

10/31/2008 8:00 PM Eastern

A municipal cable system set to start up next year in Lafayette, La., has filed a complaint with federal regulators against broadcasters in its market, alleging they aren't negotiating retransmission-consent deals in good faith and are demanding cash payments.

The Lafayette City-Parish Consolidated Government and the Lafayette Utilities System filed a 28-page complaint with the Federal Communications Commission against Communications Corp. of America, White Knight Broadcasting and the broadcasters' agent and consultant, Nexstar Broadcasting veteran Duane Lammers.

Retransmission Snarls
The American Cable Association cited several recent disputes between small cable providers and broadcasters over retransmission consent.
Trust Cable TV complained to the Federal Communications Commission on Sept. 18 about WGMB and WVLA, in Baton Rouge, La., seeking an emergency stay from losing those signals until Trust fully recovers from Hurricane Gustav.
Baja Broadband on Sept. 18 complained about KTSM of El Paso, Texas, over “take it or leave it” refusals to negotiate.
Paul Bunyan Telephone Cooperative, in Minnesota, on Sept. 22 complained that stations KRII, KBJR and KDLH violated good-faith bargaining rules.

LUS, set to launch a $110 million fiber-to-the-home video system in January, alleges that the broadcasters have: made a “take-it-or-leave-it” proposal regarding carriage of their stations; are refusing to consider anything but cash compensation; are trying to force the new cable system to carry a low-power station and an out-of-market station it “does not need or want” in order to get carriage of a “must-have” local Fox affiliate; and are demanding “exorbitant” rates for the low-power and out-of-market stations.

Lammers denied LUS's charges last week, and said that ComCorp will respond to the allegations in its answer to the FCC.

LUS claims ComCorp is threatening to withhold carriage of Fox affiliate KADN-TV if the new cable system doesn't also carry KLAF, the broadcaster's low-power station, and WVLA-TV in Baton Rouge, La., White Knight's NBC affiliate.

ComCorp and White Knight emerged from a jointly administered Chapter 11 bankruptcy proceeding in October last year.

LUS doesn't want to carry the Baton Rouge station WLVA-TV, but claims it has been told by the broadcasters and their retransmission-consent agent, Lammers, that the startup cable system has to carry it as well as KLAF in order to get KADN-TV, and its Fox programming.

LUS claims that in an Aug. 14 e-mail, Lammers told it, “Cash is king. In addition, WLVA will be part of any deal on the same terms that you carry the other stations.”

The license fees that LUS offered to pay for the stations, and the fees that Lammers wants, were redacted from the FCC complaint.

LUS claims ComCorp has violated the FCC's requirement that retransmission-consent deals be negotiated in good faith, and that parties can't just make single, unilateral proposals.

On Oct. 14, LUS said Lammers told it in a phone call again that would have to carry all three stations — KADN-TV, WVLA-TV and KLAF — in order to get a retransmission-consent deal.

In its complaint, LUS quoted Lammers as saying, “I have the leverage and will use it. You may or may not know who I am, but there are only two guys in the country that do what we do, and I am one of them. I have pulled stations off for up to 10-12 months in order to get an agreement.”

In an e-mail last week, Lammers said, “We will respond to their misrepresentations within the context of our answer. It should be pretty clear what their intent was for the conference call, and it wasn't to propose terms to reach an agreement.”

The American Cable Association, a trade group representing independent cable operators, put out a press release last week that cited not only the LUS filing, but also several retransmission-consent related complaints that other small cable systems have filed against ComCorp and White Knight stations with the FCC.

“All year long the programmers and broadcasters have claimed that the marketplace works, and operators can purchase programming on a standalone basis; however, the evidence proving otherwise keeps mounting at the FCC,” ACA Matt Polka said in a statement.

“The commission could not ask for more clear evidence that corrective measures must be taken as part of the wholesale programming rulemaking,” Polka said. “LUS is only the latest in an increasing number of operators who, quite simply, cannot deal in this increasingly abusive climate and have turned to the FCC for help. We have every confidence that under the chairman's leadership, they will get it.”

In response, Lammers said, “Thousands of retransmission-consent agreements have been completed in markets across the country, including a couple of hundred by me. These agreements were completed without conflict, complaint and with professionalism. The exception to the rule are the premeditated ambushes created by the ACA, which amount to nothing more than abuse of process. Our answers to these baseless complaints speak for themselves, and we are hopeful the commission will soon act on them.”

In rebuttal, Polka said that the LUS isn't even an ACA member, and that his organization had nothing to do with the Louisiana utility's FCC filing.

“ACA did not premeditate the facts of the case, which speak for themselves,” Polka said. “This case and others illustrate the key harm to consumers, that broadcast-station owners commonly abuse their leverage provided to them by favorable retransmission-consent rules and non-duplication regulations.”

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