NCTA Loses Argument On ‘Zombie’ Must-Carry Rights

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Updated 10am, Dec. 21, from an original post Dec. 18, to reflect various corrections tied to approval dates associated with WBIN Inc., the FCC, and NCTA; and the Dec. 4 change of call letters of WUNI-66 from WUTF.



On May 8, William Binnie‘s WBIN Inc. agreed to a deal that hands one of the nation’s leading Hispanic media companies a channel-sharing agreement for WBIN-35 in Derry, N.H. —a UHF station that has relinquished its spectrum in the FCC’s Incentive Auction.

The deal was granted by the Commission on Dec. 15. However, on July 19 NCTA-The Internet & Television Association filed comments taking to task the transfer of must-carry rights from a station that’s disappearing to its channel-sharing partner before the CSA has started.

Media Bureau Video Division Chief Barbara Kreisman just ruled on the matter.

WBIN Inc.’s relinquishment of WBIN-35’s spectrum in the FCC auction for $68,081,337 led Mr. Binnie to enter into a channel-sharing agreement with Univision to use a shared channel (a DT signal) tied to its UniMás affiliate in Boston, the Marlborough, Mass.-licensed WUNI-66. This is the former WUTF-27, which swapped call letters with WUNI on Dec. 4.

In May, Binnie agreed to part ways with the CSA, selling it to Univision for $16,764,133.70. This action came after Univision exercised a put/call option contained in a CSA agreement dated Jan. 11, 2016 that was submitted to the FCC as part of WBIN’s 177 auction application.

The deal was the first struck after questions arose regarding a now-reworked deal between The Meruelo Group and Bob Behar’s Hero Licenseco regarding the CSA of KBEH-63 in Oxnard, Calif. Hero backed initially out of the deal, which prompted an FCC Public Notice on May 8 that sought comment on the spin of channel-sharing agreements.

The spin of CSAs — and “must carry” rights — is what caught NCTA’s attention.

On July 19, NCTA filed its comments regarding the proposed CSA spin from Binnie to Univision the argument that “must-carry rights should not attach to broadcast stations that relinquish their spectrum in the auction and elect to channel-share with another broadcast station but seek to transfer their licenses before the station has constructed its shared channel facilities and commenced operations at the shared location.”

In NCTA’s view, the Spectrum Act’s provisions providing for must-carry rights for channel sharees should be narrowly construed so as to apply only where a relinquishing licensee has not only obtained a construction permit, but has built out and commenced operation on its station’s facilities.

Nineteen days later, Binnie and Univision filed a response seeking dismissal of NCTA’s comments. They called NCTA’s arguments moot, among other things.

What did Kriesman believe? “To the extent the Comments can be considered an informal objection to the pending application, we dismiss them as moot.”

She continued, “Since the Comments have been filed, a license to cover channel sharing operations for WBIN has been filed, granted, and the station is currently operating as a channel sharee. Thus, we find that the Applicants have effectively ‘commenced
operations’ as requested in the Comments. We dismiss, therefore, the Comments as moot.”

With that, the transfer of the CSA to Univision was granted—conditioned upon the Voting and Proxy Agreement between Univision and top affiliate owner Entravision Communications remaining “in full force and effect.”