A cable system operating in the Baton Rouge DMA faced the expiration of retransmission consent contracts 12/31/11, and despite the fact that efforts to get a new deal failed, it continued to carry two local broadcast television stations. The FCC’s initial finding: continued carriage was against the rules, and the initial monetary penalty added up to a six-digit figure.
The broadcast stations involved in the disputes are CommCorp.’s Fox WGMB and White Knight’s NBC WVLA. The stations are party to an SSA that has CommCorp. in the driver’s seat.
The cable company is Bailey Cable TV Inc., which according to the FCC serves St. Francisville; Angola; and certain unincorporated areas within West Feliciana Parish, all in Louisiana.
Bailey said it was aware of the expiration, and the television company’s had warned against continued carriage of their stations both before and after the contract expired. It carried them anyway, arguing that the television stations were seeking a “dramatic increase in their fees, that they picked up the signals via antenna rather than via satellite or internet, and that the broadcasters were using the FCC as a “tool.” It also asked the FCC to “require the negotiation of a reasonable rate.”
The FCC said it participated in a session with the broadcasters and the cable company that did result in an agreement 2/3/12.
The FCC said that the broadcasters correctly interpreted their rights regarding retransmission. The antenna portion of Bailey’s remarks was irrelevant. And the cable company was liable for a fine.
The base forfeiture for this violation is $7.5K per day. The FCC said the unauthorized retransmission went on for 34 days, so Bailey was liable for a $255K penalty for each station, or a total of $510K.
However, after taking the cable system’s financial realities into account, the FCC exercised its discretion and reduced the penalty to $15K per station, for a total of $30K. The fine is at the notice of apparent liability stage, meaning Bailey still has an opportunity to appeal.
RBR-TVBR observation: There you have it – it is one thing to engage in hardball negotiations. It is quite another thing to toss the FCC rules out the window in the process.