Policy

LIN Spat Sparks Salvo From Commisso

9/05/2011 12:01 AM Eastern

Mediacom Communications’s refusal
to pay what it calls exorbitant rate hikes for LIN Media
broadcast stations in five states is serving as a backdrop for
chairman and CEO Rocco Commisso’s ongoing quest for
retransmission consent reform.

Eight LIN stations in Florida, Michigan, Wisconsin, Alabama
and Indiana went dark on Aug. 31 after the parties
could not reach an agreement on proposed retransmission
rate increases. If a deal isn’t reached soon, two more stations
could be added to the mix. LIN gave Mediacom a one-week
extension until Sept. 6 for stations in Norfolk, Va., to allow
affected viewers to continue to receive local news coverage
of Hurricane Irene in that area.

“We are disappointed in the outcome of our negotiations,
especially since we have successfully reached deals with
every major cable, satellite and telecommunications company
that recognizes our fair market value,” LIN said in a
statement.

TRIPLE THE FEE?

LIN pulled its Fox affiliates WALA-WFNA in Mobile, Ala.-
Pensacola, Fla.; WOOD (NBC) and WOTV (ABC) in Grand
Rapids, Mich.; WANE (CBS) in Fort Wayne, Ind.; WLUK
(Fox) in Green Bay, Wisc.; WTHI (CBS) in Terre Haute, Ind.;
and WLFI (CBS) in Lafayette, Ind., on Aug. 31 at 5 p.m. local
time.

Mediacom has claimed that LIN is seeking to triple the
former retransmission fee. LIN counters that it is only seeking
fair value for its content.

The dispute, which Mediacom claims affects tens of thousands
of its 1.4 million customers, comes as another MSO,
Time Warner Cable, said it has reached agreement with LIN
regarding its Terre Haute station. TWC said Sept. 1 that it
had reached a retransmission agreement with WTHI DT2.

Commisso sent a frank and sometimes critical letter
to Federal Communications Commission chairman Julius
Genachowski, asking for concrete reforms to federal
retransmission-consent rules.

Commisso is no stranger to retransmission disputes. He
was involved in several high-profile battles with Sinclair
Broadcast Group concerning stations in his core markets
in Iowa over the years. And Mediacom helped found the
American Television Alliance with other operators and satellite
companies, to lobby for retransmission reform.

In his letter to Genachowski, Commisso urged binding
arbitration for retransmission disputes; a mandate that
broadcasters and cable networks publicize the fees they
charge; and a standstill mechanism to prevent broadcasters
from pulling signals during retransmission negotiations.

Commisso also threw in requests for a few programming
cost reforms, such as banning volume discounts and creating
a carefully designed a la carte system so customers pay
only for the programming they want.

Commisso took the FCC chief to task for not following
through on his promise three years ago to address
the issue, saying the agency’s “inexplicable inaction”
has led to higher prices and fewer choices for
consumers, and opens the door for programmers
to leverage their online content for higher fees.

“When, as is inevitable, the retransmission consent
cycle beginning this Oct. 1 and recurring renewal
negotiations for cable networks trigger a
fresh round of actual and threatened service disruptions
and yet another subscriber rate increase,
the Commission must share responsibility with
the content owners,” Commisso wrote.

WHAT THE FCC HAS DONE

The FCC took some initial steps towards retransmission
reform in March, with a proposed
rulemaking that further defined good-faith
bargaining and potentially waiving programexclusivity
rules that would allow distributors to
seek out deals with other stations during retransmission
impasses.

But the FCC, which has yet to vote on those proposals,
said it clearly did not have the authority to require arbitration
or to mandate standstills.

Miller Tabak media analyst David Joyce said that although
Commisso’s requests don’t stray far from past industry
calls for action, there is no harm in asking.

“Clearly the FCC has had, and still has, a lot on its plate,
but it became obvious that the Genachowski-led FCC was
mostly focused on the broadband portion of communications,
and has, to date, largely held the position, as the Martin-
led FCC did, that they will not interfere with commercial
arrangements,” Joyce said.

But the analyst added that he expected retransmission
battles to become even more important, mainly because a
growing number of station groups now must pay of a portion
of their retransmission haul back to their respective
networks, in some cases cutting their profits in half.

March