Last week, the FCC announced a consent decree with Sinclair Broadcast Group where Sinclair agreed to pay $9.495 million to the FCC to settle claims that it negotiated retransmission consent agreements involving stations that it did not own with MVPDs (cable and satellite companies). Sinclair did not admit any liability – but stated that it settled the proceeding to get its license renewals granted and otherwise turn the page on the issues that were raised so that it could concentrate on ATSC 3.0 and other business issues. After the amount of the settlement was announced, there was much thrashing in the media about the meaning of such a large payment. But was there really any greater significance in this fine?
It is possible that the only real meaning that can be derived from this payment is that the FCC takes seriously its rules (about which we wrote here) and the subsequent statute (about which we wrote here) that forbids one TV station from negotiating a retransmission consent agreement on behalf of another non-commonly owned station in the market. The rules prohibit joint negotiations unless such stations are “directly or indirectly under common de jure control.” The allegations in the order announcing the settlement were that Sinclair had negotiated or coordinated negotiations with stations in its market with which it had a relationship (e.g. an LMA or a JSA), but which it did not own – presumably meaning that the FCC concluded that these relationships did not constitute de jure control of these other stations. Sinclair did not admit liability. It does not seem as if this is a common issue, nor one where a large payment like the one made here is likely to affect operating practices of other stations. Instead, it seems to be a one-off fine, making clear the FCC does not see stations are being under common control unless they are commonly owned. We’ll see if there is other enforcement in this area – but we expect it is not one where there will be seeing multiple cases raising similar issues.