Nexstar Fined $720,000 By FCC For Retrans Violations
By Ted Hearn, Editor of Policyband
Washington, D.C., Feb. 8, 2024 – Nexstar Media Group has been fined $720,000 – double the normal amount – for violating Federal Communications Commission rules while negotiating a new carriage deal last year with a cable company in Hawaii.
The FCC’s Media Bureau, in an order issued today, said Nexstar violated agency rules by demanding that Honolulu-based Hawaiian Telcom agree not to file an FCC complaint against the broadcaster as a condition of reaching a new carriage deal. Hawaiian Telcom filed a complaint anyway.
The FCC has banned Nexstar’s no-complaints bargaining requirement for decades as a violation of the duty to negotiate cable carriage deals – also known as retransmission consent – in good faith. Nevertheless, in its defense, Nexstar has argued that contracts with so-called clean slate provisions that require the withdrawal of complaints are routine.
Nexstar plans to fight the Media Bureau’s decision.
“Nexstar believes the proposed forfeiture is unwarranted, excessive, and in violation of the law and we will challenge the FCC’s action,” said Gary Weitman, Nexstar’s EVP/Chief Communications Officer, in a statement.
Nexstar says it is the largest local television broadcaster in the country, with 200 owned and partner broadcast stations reaching 68% of the U.S. population. The company recently reported $5.12 billion in annual revenue.
The dispute between Nexstar and Hawaiian Telcom resulted in the cable company’s loss of six broadcast TV stations from June 30 to July 20 last year, the FCC said.
The FCC said it opted to double the fine to $720,000 so that Nexstar’s penalty was not seen as a slap on the wrist.
“The public interest would be served by upwardly adjusting to $120,000 the per violation base forfeiture amount to ensure that Nexstar’s ability to pay does not render the proposed forfeiture 'merely an affordable cost of doing business' and that the forfeiture acts as a 'meaningful sanction and deterrent against future misconduct,'” the FCC said.
The agency also said a large fine was justified based on the scope of the injury, which included the loss of the local Fox, CW, and MyNetwork TV affiliates.
“We also take into account that the harm suffered by Hawaiian Telcom’s subscribers was multiplied with each station that went dark, which in this case, included “three of the big six broadcast stations, including the top-rated station,” the FCC said.
Hawaiian Telcom is owned by altafiber in Cincinnati. Macquarie Infrastructure Partners acquired altafiber (formerly known as Cincinnati Bell) in September, 2021.
The FCC’s decision wasn’t much of a surprise. Last month, the agency fined Mission Broadcasting $150,000 for violating FCC rules in demanding that Comcast agree not to file an FCC complaint against the station owner over their contract renewal. Comcast – which lost WPIX for two weeks in December, 2022 – filed a complaint against Mission over a no-complaints condition.
Nexstar – which the FCC says effectively owns Mission – negotiated the WPIX carriage deal in the New York City market with Comcast.
Hawaiian Telcom's complaint also alleged that Nexstar violated FCC rules by refusing to extend the agreement until the parties reached either a new agreement or an impasse. The FCC said the cable company failed to meet its legal burden in this respect.
Nexstar has challenged the notion that seeking restrictions on the filing of complaints was out of the ordinary.
“The concept of releasing FCC-related claims or withdrawing FCC complaints is not novel,” Nexstar said in its answer to Hawaiian Telcom’s complaint. “Such releases are routinely included in clean slate language often insisted on by both broadcasters and [multichannel video programming distributors] in retransmission consent negotiations.”
The FCC order said it found “these arguments unpersuasive” because long-standing agency rules stiplulated that “proposals for contract terms that would foreclose the filing of complaints with the Commission” are presumptively at odds with the good faith negotiation requirement.
This story has been updated to include Nexstar's statement.