Senators Demand FCC Action on Sinclair-Mediacom Fight

Jan 31, 2007  •  Post A Comment

Leaders of the Senate Commerce Committee are demanding that the Federal Communications Commission act to resolve a dispute between cable operator Mediacom and Sinclair Broadcast Group that threatens to leave some subscribers to the cable system without access to Sunday’s Super Bowl.

Committee Chairman Sen. Daniel Inouye, D-Hawaii, and ranking member Sen. Ted Stevens, R-Alaska, said the FCC has authority to order binding arbitration in the fight over how much Mediacom should pay Sinclair to retransmit signals from the station group’s local outlets. Some Mediacom subscribers currently aren’t receiving Mediacom signals.

“If this situation is not resolved promptly, rural Americans in some 12 states will continue to be deprived of valuable local broadcast programming, including in some cases the upcoming Super Bowl,” the Senators said in a letter sent Tuesday to FCC chairman Kevin J. Martin. “Last year, some Alaskans were denied access to the Super Bowl and we do not want to see a similar situation happen in other states.”

The Mediacom-Sinclair dispute may signal how cable operators and station groups across the country come to terms over the issue of retransmission consent. Industry heavyweights are lining up on each side of the fight, and CBS President and CEO Leslie Moonves has been among the loudest voices demanding cash compensation for retransmission consent, saying such fees could add up to hundreds of millions of dollars.

On the eve of Mr. Martin’s first appearance before the Commerce Committee since the election that put Democrats in control, senators rebuted the FCC’s claim that it lacks authority to order binding arbitration and urged the agency to at least make sure no one is shut off from programming while the two sides negotiate. Mr. Martin is a Republican appointed by President George W. Bush and a majority of FCC commissioners are Republican.

The senators said they plan to question FCC commissioners about the issue during Thursday’s hearing.

Mediacom dropped 22 Sinclair stations from its systems in 12 states on Jan. 5 after being unable to reach an agreement over how much it should pay to retransmit Sinclair signals.

Sinclair wants Mediacom to pay for station signals it had been retransmitting for free, arguing that station groups should get fees like other cable content providers.

Mediacom argues that Sinclair has been unreasonable in negotiating the issue, demanding high fees for local channels and payments to carry both network and non-network affiliates.

The FCC’s Media Bureau on Jan. 4 rejected Mediacom’s complaint that the Sinclair unfairly refused to negotiate in “good faith” and while advising binding arbitration, said it doesn’t have the authority to require the parties to submit to binding arbitration.

Mediacom has appealed the decision to the whole FCC.

Late Wednesday Sinclair cautioned the senators and Mr. Martin about imposing arbitration while also warning that the senators’ letter could “chill” negotiations.

“While I can appreciate your desire to make sure that the public is not inconvenienced, I hope you can understand the danger of suggesting the government should order private parties to enter into an agreement when they are not able to reach agreement on their own,” wrote Sinclair VP/ General Counsel Barry M. Faber. “Although the laws surrounding retransmission consent imposes on the parties an obligation to negotiate in good faith, the laws clearly do not require an agreement to be reached.”

The letter also suggests that MediaCom is refusing to negotiate carriage fees in the belief the government will step in.

(Editor: Baumann)