In a decision released last week on an increasingly common issue, the FCC refused to get involved in a retransmission consent negotiation dispute between a cable television system and a television station. The dispute involved Sinclair Broadcasting’s demands for cash consideration for the carriage of its television stations by cable systems owned by Mediacom Communications. In a Petition filed with the FCC, Mediacom argued, among other things, that Sinclair was not asking for marketplace rates for the carriage of its stations, and thus was violating the duty of the television station to bargain in good faith with the cable system.
In the decision, the FCC’s Media Bureau essentially concluded that there was no obligation of a television station to agree to marketplace rates in exchange for its agreement to provide the cable system with retransmission consent. Essentially, the FCC said that as long as Sinclair did not offer only a take-it-or-leave-it proposal, the FCC would not get involved in deciding whether a proposed price was reasonable or not. Sinclair owed no duty to disclose its other deals with other systems to establish what was a marketplace price for its signals, as long as it made offers to Mediacom. If Sinclair wanted to hold out for more consideration than it had ever received from any other cable system before, that was it’s decision. As the FCC put it, one party was incorrectly valuing the television signal – and that party would ultimately pay in the marketplace if the station was not carried.
This decision seems to signal the FCC’s reluctance to get involved in retransmission consent negotiations. As long as the parties talk, and make proposals to each other, the FCC will seemingly rarely intervene in evaluating the specifics of those proposals. This decision can be appealed to the full Commission, though it will be interesting to see if the case is decided through that appeal or the parallel antitrust litigation that is going on, or whether the parties will heed the Media Bureau’s admonition in the last paragraph of its decision – to reach a negotiated decision that both can live with, one which won’t deprive cable subscribers of access to the signals of the television stations that are involved.