Dish Network has filed a formal complaint with the Federal Communications Commission, claiming that Sinclair Broadcast Group has refused to negotiate a retransmission consent agreement in good faith , threatening to darken 153 stations in 79 markets at 11:59 p.m. tonight.
Dish claims that Sinclair, one of the largest station owners in the country, is refusing to negotiate with the satellite giant unless it is allowed to include 32 stations in its markets it doesn’t own. Dish says that is a direct violation of the STELA Reauthorization Act of 2014, and is asking the FCC to intervene.
Dish said negotiations with Sinclair had been going smoothly and it had even offered a short-term extension including a retroactive “true-up ” when new rates were agreed upon, and would preserve the ability of Dish customers to access the Sinclair local stations while negotiations continued. The “true-up” would ensure that Sinclair was made whole at the new rates for the period of the contract extension.
Instead of taking the offer, Sinclair demanded that it be allowed to negotiate on behalf of the other 32 stations, according to Dish.
“We’re asking the FCC to act on behalf of consumers to bring Sinclair back in line with the law,” said Dish senior vice president and deputy counsel Jeff Blum n a statement. “Sinclair’s ‘take-it-or-leave-it’ posture is in direct violation of federal regulations – they have offered a single path and are threatening that any deviation from that path will lead to a consumer blackout.”
Sinclair officials were not immediately available for comment, but the company said during its second quarter earnings call earlier this month that it was in negotiations with Dish. About 75% of its retrans agreements are due in the next 12 months, which chief operating officer David Ay said at the time gives the broadcaster an “opportunity to reset the fees we receive under all of these deals.”
“Since we offered to retroactively true them up when new rates were agreed upon, Sinclair had nothing to lose and consumers had everything to gain from an extension of our existing contract that would allow negotiations to continue,” Blum added. “Instead, Sinclair has rejected our offer and has chosen to use innocent consumers as pawns to gain leverage for the economic benefit of Sinclair, while causing substantial harm and disruption to the lives of those very same consumers who ultimately will bear the brunt of the unfair price increases sought by Sinclair.”
Dish is asking the FCC to immediately grant preliminary injunctive relief while the Commission considers the complaint, and to require Sinclair to negotiate in good faith for the stations for which it has control under FCC rules.
The formal complaint is here:
The American Television Alliance, whose members include Dish, fired off a press relaase Saturday hammering Sinclair:
“This is almost as bad as thieves looting a store before the police arrive," said ATVA spokesman Trent Duffy. "This week, the FCC Chairman indicated the need to take measures to protect consumers against this kind of abusive behavior, but with their backs against the wall, it appears that broadcasters are trying to squeeze every penny out of the system while they still can. This outrageous and unprecedented blackout should not happen.”
FCC Chairman Tom Wheeler circulated an order eliminating broadcast exclusivity rules that would allow cable operators to import network or
syndicated programming from out-of-market stations, including when they can't strike retrans deals with in-market stations with that same programming.
he also launched a congressionally-mandated review of good faith negotiations that will almost certainly include whether blackouts should be part of that.
An FCC spokesperson was not available for comment on the timing of a response to the Dish petition.