Mediacom Communications is back in battle formation against Sinclair Broadcast Group, claiming in a filing with the Federal Communications Commission that the broadcaster — the source of a heated retransmission-consent battle in 2006 — is attempting to gouge the cable company with higher fees.
Sinclair executive vice president and general counsel Barry Faber said that he expects to file a response with the FCC shortly. While he could not reveal specific figures, he added, the increases Sinclair is requesting are not out of line.
“The problem appears [to be] that the market they've seen in the deals they have done is different from the market we've seen in the deals we have done,” Faber said.
Mediacom and Sinclair engaged in a heated battle in late 2006, after the broadcaster pulled its signal from Mediacom systems with about 700,000 subscribers in Iowa. That represented more than half of Mediacom's 1.3 million total customers and threatened to cripple the company.
Mediacom settled the dispute in February 2007, after chairman and CEO Rocco Commisso said he realized he would get no relief from the FCC. On its fourth-quarter conference call with analysts shortly after settling with Sinclair, Mediacom said it lost about 7,000 subscribers as a result of the dispute.
“At the end of the day, we caved into their demands,” Commisso said of Sinclair on that 2007 conference call.
While no terms were released, it was speculated that Mediacom agreed to pay a retrans fee of about 50 cents per subscriber per month.
According to documents filed with the FCC on Oct. 22, that deal is scheduled to expire on Dec. 31, and despite Mediacom's attempt to negotiate a new deal, the MSO claims that Sinclair is setting the stage for another battle.
Mediacom began negotiations with Sinclair on a new retrans deal in April, according to the filing.
“Sadly, after more than five months, it is clear that Sinclair, emboldened by its success in its previous dispute with Mediacom, is not interested in working out a reasonable agreement reflecting competitive market considerations,” Mediacom wrote in the filing. “Instead, Sinclair has only begun going through the motions, trying to do just enough to avoid a per se violation of its good faith negotiation obligations while simultaneously demanding exorbitant increases in what it charges Mediacom for retransmission consent.”
Faber said that Sinclair has made a counter offer, but that Mediacom has refused to negotiate further, preferring instead to ask for government help.
“This seems to be more of the same of what they did three years ago,” Faber said. “We expect the exact same result as we got three years ago.”
But Faber said that Sinclair will not bend under pressure.
“We want to get paid what we think is an appropriate amount,” Faber said. “If we can't get a deal done, we're prepared to walk away from the table. There are two months left on the existing deal and we will make every effort to try to get a deal done during that period.”
Mediacom is asking for interim relief — a ruling from the FCC that allows it to continue carrying the Sinclair stations as it negotiates — and permanent relief in the form of an order from the agency requiring Sinclair to offer a fair rate based on those the MSO has paid to other broadcasters, or directing both parties to solve their disagreements through binding arbitration.
Faber said that he is willing to go back to the bargaining table with Mediacom, but said that he believes the MSOs chances of getting the FCC involved in the negotiations are slim.
“Our goal is to file [a response] quickly and to hopefully have the FCC act quickly,” Faber said. “The best way to get Mediacom to move forward with getting a deal done is for them to realize they are not going to receive government intervention.”
Mediacom vice president of legal and public affairs Tom Larsen said that although Mediacom's attempt to attract FCC intervention in its last retrans dispute with Sinclair failed, a new administration and some new information could sway the agency this time.
“Our position is we didn't feel that under the Martin commission our facts got fully vetted,” Larsen said. “This is a new commission and a new opportunity to present them with the facts that in some cases are different than they were last time.”
He pointed to Sinclair's purchase of the non-licensed assets of a Fox affiliate in Cedar Rapids, Iowa, last year, which Mediacom claims gave the station group two TV stations in that market.
“The problem is they [Sinclair] never went to the FCC and asked them to approve the duopoly,” Larsen said.
Sinclair has said it operates the station, but that it is owned by Second Generation of Iowa Ltd.