FCC Fines WPIX Owner Mission Broadcasting $150,000 Over Retrans Dispute With Comcast
By Ted Hearn, Editor of Policyband
Washington, D.C., Jan.12, 2024 – WPIX owner Mission Broadcasting is being fined $150,000 by the Federal Communications Commission over a contract dispute with cable giant Comcast that caused the cable TV company to file a complaint with the agency in 2022.
WPIX is a popular independent TV station serving New York’s tri-state area and is effectively the property of Nexstar Media Group.
TV stations and cable operators have a legal duty to negotiate carriage deals, called retransmission consent, in good-faith. But the FCC found that Mission violated that standard by requiring contract terms with Comcast that would have prevented either side from filing a complaint with the FCC.
The FCC, citing language adopted in 2000, said “proposals for contract terms that would foreclose the filing of complaints with the [FCC]” are presumptively inconsistent with the good faith negotiation requirement.
The FCC said the ability to file complaints, even after deals had been signed, underpinned the good-faith requirement.
“Our rules permit the filing of complaints even after an agreement is signed precisely because the process can be corrupted without being totally derailed,” the FCC said.
The FCC’s decision was handed down Friday by Holly Saurer, Chief of the FCC’s Media Bureau.
Comcast, the FCC said, filed the complaint on Dec.12, 2022 – five days before the two sides reached a carriage deal for WPIX without “the disputed terms, and Comcast restored WPIX to its systems” after dropping WPIX on Dec. 3.
Nexstar Media Group negotiated with Comcast on Mission’s behalf. Comcast’s complaint included both TV station owners.
In a footnote, the FCC said; “In this Order we address only a subset of the allegations against Mission, the licensee of WPIX, and do not address any of the allegations against Nexstar …”
The FCC added, “The remaining allegations are under review by the [FCC] pending the outcome of ongoing investigations.”
In other footnotes, the FCC attempted to explain Nexstar’s financial relationship with Mission.
According to the FCC, “while Mission is not a subsidiary of Nexstar, it operates as a Variable Interest Entity (VIE) of the larger company, meaning that Nexstar is considered to have a controlling interest in Mission for financial reporting purposes with the U.S. Securities and Exchange Commission.”
The agency added, “We note that as a VIE, Mission’s revenues and assets are consolidated with Nexstar’s financial accounting and annual reporting. Hence, Mission and Nexstar are effectively treated as a single entity for financial purposes in the Nexstar 10-K.”
At the bottom the WPIX website are Nexstar’s name and copyright.
Philadelphia-based Comcast is the largest cable TV company in the U.S., with 14.5 million subscribers.
Nexstar told the FCC that “releasing FCC-related claims or withdrawing FCC complaints is not novel,” and “parties typically agree to withdraw good faith negotiation complaints once retransmission consent agreements have been reached.”
The FCC concluded, “We find these arguments unpersuasive.”
Nexstar has the right to appeal the fine.
Mission said it should not be held responsible for Nexstar’s actions with Comcast.
“Not only does this argument contravene basic principles of agency law,” the FCC said, “it also ignores [FCC] precedent that licensees are ultimately responsible for the acts of their licensed stations.”
The FCC’s decision is likely good news for Hawaiian Telcom, owned by altafiber in Cincinnati. Hawaiian Telcom last summer filed an FCC good-faith complaint against Nexstar that tracked closely with the details in Comcast’s.