FCC finds for Sinclair in Mediacom dispute
The extended retransmission agreement between Sinclair Broadcast Group and cable operator Mediacom ends this weekend without a new deal, and according to Mediacom, Sinclair is not approving a further extension pending the possibility of arbitration. Mediacom claimed that Sinclair's attorney Barry Faber said that its CEO David Smith was not available to approve renewed discussions, and that it would fill the holes left by the loss of Sinclair station in its cable lineups with "quality family entertainment from a variety of our programming partners." Mediacom's earlier effort to get the FCC to step in on grounds the Sinclair did not negotiate in good faith failed. However, the FCC did strongly suggest that the parties consent to binding arbitration. Mediacom said it was interested in 13 Sinclair station in 12 markets that have big fourn network affiliations, and has little or no interest in nine others affiliated with CW or MNT. So in addition to not agreeing with Sinclair on price, it doesn't want to be force-fed all 22 to get the 13 it wants. Sinclair noted that Mediacom did not appear to object to the CW/MNT stations, if they were provided gratis. In the end, the FCC ruled that Mediacom's five count complaint did not provide sufficient evidence of a failure to negotiate in good faith on the part of Sinclair. The Commission strongly recommended further hard bargaining, followed by binding arbitration if necessary, provided either by its own Media Bureau or by the American Arbitration Association. If that route is taken, the current agreement would be extended pending resolution of the dispute. Both sides claimed victory, although Sinclair moreso. Further, Mediacom planned to appeal the ruling.
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Mediacom Chairman and CEO Rocco B. Commisso: "We are disappointed with the Media Bureau's decision, which is against the best interests of Mediacom customers and has far-reaching consequences to television viewers all over America. However, we are pleased that the Bureau strongly encouraged the parties to submit to binding arbitration and to continue carriage of the stations. We offered this solution to Sinclair over a month ago, but they refused. We are committed to binding arbitration and are hopeful Sinclair will heed the Bureau's recommendation and avoid a disruption in service to our customers."
Mediacom SVP and General Counsel Joseph Young: "As for the merits of the decision, we believe the Bureau got it wrong. It is unfortunate that the Chairman's office chose to deny our request for a full Commission vote on this important matter. Contrary to Sinclair's assertion that 'the FCC's formal involvement has ended,' Mediacom is going to exercise its right to have the order reviewed by the full Commission. Given the immediate negative impact the decision will have on the public, we intend to ask Chairman Martin to schedule this review on an expedited basis. Once all of the Commissioners have an opportunity to review this matter, Mediacom believes it will prevail on the merits," concluded Young.
Sinclair Vice President and General Counsel Barry Faber: "We are extremely pleased that the FCC ruled so completely in our favor in this matter. In its order, the FCC agreed with virtually every argument advanced by Sinclair, disagreed with virtually every claim made by Mediacom, and this decision represents a resounding victory not just for Sinclair, but for all broadcasters in their efforts to be fairly compensated by cable companies. In addition to its overall holding that our actions in this negotiation have been completely legal, we were particularly gratified by the FCC's conclusion that marketplace considerations for the value of broadcast stations can take into account the prices cable companies pay for nonbroadcast, cable channels."
Sinclair CEO and President David Smith: "We fully expected this very logical decision by the FCC, just as we expected the decision by a Federal District Court last year not to grant an injunction allowing Mediacom to continue to carry the stations in the absence of an agreement. We are hopeful, however, that the realization by Mediacom that the government is not going to assist them in obtaining the right to carry the stations may help to change their negotiating position to one which is more likely to result in a deal. In the absence of that occurring, however, we unfortunately will no longer be carried on the Mediacom cable systems. We would like to remind the public that the stations will continue to be available to them via free over-the-air delivery or from another multi-video program distributor, such as DirecTV or The Dish Network."
