The cable group is concerned that Sinclair could use “after-acquired clauses” in Indianapolis and Greensboro, N.C., to raise retrans rates.
The American Cable Association has asked the FCC to put the brakes on its review of the Sinclair-Tribune merger, arguing that Sinclair has withheld information needed to evaluate the deal.
“Until Sinclair discloses information regarding the stations it proposes to divest, it has not provided the ‘full and complete record’ necessary to evaluate the proposed transaction. Without such information, the commission cannot proceed with its review,” the trade group told the FCC is a filing dated March 12.
The ACA, which represents smaller cable operators, takes aim at Sinclair’s latest change in plans to keep two top 4-rated stations in Indianapolis and Greensboro, N.C.
Such duopolies are currently disallowed, but the FCC has said it will consider allowing them on a case-by-case basis.
At first, Sinclair said it would place one of the stations in each of the markets in a trust while the FCC conducts its case-by-case review. But then it modified that to say it would ask the FCC for a temporary waiver during the commission’s review
There’s a big difference in the two approaches, ACA said. If a station is in trust, Sinclair doesn’t own it and so it would not be able to exercise after-acquired clauses.
Such clauses allow station groups to automatically raise retransmission fees of newly acquired stations to the higher level of its group-wide retrans agreements.
However, ACA explained, if Sinclair gets a temporary waiver to own the stations, it will be able to immediately take advantage of the after-acquired provision.
“To be clear, our concern here is not solely with Sinclair’s or any other broadcaster’s use of after-acquired station clauses, although we have expressed concerns with such clauses in the past. The new issue here is that, by combining after-acquired station clauses with temporary ownership waivers, Sinclair could — intentionally or otherwise — automatically increase retransmission consent prices for stations that Sinclair cannot lawfully own.”