Add DirecTV, Dish Network and Insight Communications to the list of supporters of Mediacom in its retrans fight with Sinclair Broadcast Group.
They distributors say that broadcasters negotiating for more than one Big Four network affiliate in a market are exercising undue leverage whether the station is co-owned, under a leveraged market agreement, or other shared services agreement, or whether it is a single station with a second multicast affiliation.
Actually, the trio said they could not weigh in on the factual merits of the allegations in the Mediacom complaint and made "no particular claims" to such knowledge, but that didn't stop them from proclaiming that such undue leverage harms consumers.
In a letter dated Monday to the FCC, a copy of which was supplied to Multichannel News, the carriers said they shared "public-interest concerns" about a single station negotiating "for more than one of the "Big Four" national broadcast networks -- ABC, CBS, Fox, and NBC -- in a particular market." Those include that the combo
could represent undue leverage.
The letter was guarded in its tone, saying only that the FCC should take into account that fact, if it is a fact, when examining the complaint and determining whether the broadcasters has negotiated in good faith.
Mediacom, with strong support from Time Warner Cable and the American Cable Association, has asked the FCC to rule on whether a broadcasters negotiation for both its owned station and one with which it has a local marketing agreement in the same market represents good faith bargaining, or instead a bending of the FCC duopoly rules to its advantage to obtain undue leverage.
In their letter, the three companies pointed out they have negotiated thousands of retrans deal. They said that while mulichannel video providers like satellite and cable companies "generally have" only one choice for network programming, "network broadcasters now have multiple avenues for distribution. This is an enormous 'structural market change' in the retransmission-consent realm - one unforeseen when Congress first created the regime," they argued.
They also pointed out that Department of Justice has noted that "this situation is exacerbated" when a station negotiates for another in a market, even more so when they are both Big Four network affiliates.
"In our experience, stations possessing "duopoly" (or "triopoly" or "quadropoly") power over network programming exert enormous -and, in our view, undue - leverage in retransmission consent negotiations," they wrote. "Put another way, a station that controls the availability of NBC programming in a market has market power, but a station that simultaneously controls both NBC and Fox programming in that market has far greater market power. This is true whether the station can exercise this control due to ownership of two stations in a market, through a management, services or marketing arrangement, or by multicasting the programming of two networks at once from a single station."
They argued that the result was higher retrans fees than would otherwise be the case, and a larger threat of service disruption if the their terms are not met (Mediacom has asked the FCC to prevent Sinclair from pulling its signal while the retrans complaint is being considered). "Both of these outcomes harm consumers," said the companies.