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Broadcasters See Retransmission Cabal

11/21/2008 7:00 PM Eastern

Broadcasters filed complaints with federal regulators last week accusing three small cable operators of being part of a “conspiracy” led by the American Cable Association to file “specious” complaints against broadcasters regarding retransmission consent.

ComCorp, owner of KTSM-TV in El Paso, Texas, lodged the first of the complaints with the Federal Communications Commission against Baja Broadband, charging the cable system has “brazenly” refused to negotiate a new retransmission-consent deal in good faith. The New Mexico cable operator filed its own complaint against the station owner in September.

In its nine-page filing early last week, ComCorp also charged that Baja is part of a “conspiracy” being led by the ACA to file “specious complaints” against broadcasters.

Then later last week, ComCorp and Granite Broadcasting also filed complaints — similar to the one against Baja — against Trust Cable TV in Mississippi and Paul Bunyan Rural Telephone Cooperative in Minnesota, also accusing them of bad-faith negotiating, as well as conspiring with the ACA “in a collusive endeavor” to lodge frivolous FCC complaints, get media attention and advance the cause of a retransmission-consent quiet period.

The ACA, a lobbying group for independent cable operators, called ComCorp's charges “an utter lie.”

And the lawyer for the three operators, Chris Cinnamon, called allegations of a conspiracy “utterly bizarre and baseless,” saying that the FCC “should sanction the parties and their counsel for submitting such falsehoods on the record.”

In its FCC filing against Baja, ComCorp said: “The Baja complaint [that the operator has pending against it] reflects one step in a pattern of abusive conduct being carried out by various clients of the same law firm who, in a conspiracy coordinated with the American Cable Association, also represented by the same law firm, have filed a series of specious complaints and 'comments' against various broadcasters, and issued multiple press releases, in an effort to gain media attention and political advantage during this retransmission-consent negotiation period.”

ComCorp went on to allege: “The objective of this collusive endeavor is to advance, among other things, the request of cable operators for a lengthy 'quiet period' and to strip broadcasters of their retransmission rights now that the retransmission market has, for the first time, become truly competitive.”

Earlier this fall, Baja, Trust Cable and Paul Bunyan each filed retransmission-consent related complaints against either ComCorp or Granite Broadcasting, who are owned by Silver Point Capital, a hedge fund.

All three cable operators are represented by Cinnamon's Chicago law firm, Cinnamon Mueller, which is also outside counsel for the ACA.

The ACA immediately denied the broadcasters' conspiracy allegations.

“These counterclaims filed by the broadcasters and being spread around by the NAB (National Association of Broadcasters) are nothing more than an attempt to distract the FCC from the real issue, which is the much-needed and long overdue reform of retransmission-consent rules and regulations,” ACA president Matt Polka said.

In his statement, Cinnamon said, “My overriding reaction to the complaints is deep sympathy for the [FCC] Media Bureau lawyers that will have to read that garbage. The complaints are utterly without merit and, at one level, are merely stink bombs launched by these broadcasters in futile attempts to distract from their conduct in dealing with these small operators.”

He added, “The FCC's lawyers are smart and will see through all this.”

Peter Kahelin, Baja Broadband's CEO, also denied ComCorp's charges regarding any ACA conspiracy. He said his company was an ACA member, but that he hadn't been an active member or attended an ACA meeting in years.

“All I can say is I'm quite disappointed that they [ComCorp] would even consider going down that path,” Kahelin said. “Unequivocally, there is no conspiracy. … I will honestly admit that I have not even been to an ACA meeting of any kind in the last eight years. … I would not even have known who the leadership was. … That kind of debunks the conspiracy theory.”

In its filing against Baja last week, ComCorp claimed its consultant, Duane Lammers, had made repeated efforts to initiate retransmission-consent talks with Baja Broadband, to no avail. Baja denies that.

ComCorp also said its parent, Communications Corp. of America, had recently filed a separate complaint against Baja Broadband, one that alleges that the cable operator doesn't have “express written” permission to carry KTSM.

Communications Corp. of America alleges, and ComCorp repeats the allegation, that Baja Broadband has been carrying KTSM without the station's consent for two years.

“When Baja learned of CCA's unauthorized carriage complaint to seek appropriate FCC relief, Baja Broadband retaliated by submitting a frivolous and wasteful FCC complaint against ComCorp,” ComCorp said in its complaint last week. “The Baja complaint is a specious and sham pleading, and Baja's tactics continued to demonstrate that Baja had no interest in reaching a retransmission consent agreement, but rather as a stalking horse for a broader political agenda.”

The dispute involves Baja Broadband's 20,000-subscriber system in Alamogordo, N.M. Baja Broadband in March 2006 reached a deal to acquire that system from Charter Communications.

In its FCC complaint in September, Baja Broadband stated that it had written KTSM a letter in June 2006 to say it planned to continue carrying that station, and that Charter had assigned it its carriage rights for KTSM.

Baja Broadband said that it never received an objection or any communication from the station after that, until Lammers called on Aug. 18 with a proposed deal, also telling the cable operator that it was “illegally” transmitting KTSM.

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