Nexstar-Granite Suit Is FCC Retrans Fodder

Nexstar Broadcasting’s July 25 antitrust suit against Granite Broadcasting for allegedly monopolizing the local TV ad market in Fort Wayne, Ind., has become a debating point in the FCC’s retransmission consent reform proceeding.

The American Cable Association (ACA), a trade group representing small cable operators, promptly seized on news of the Nexstar suit as evidence that even broadcasters understand that concentration of station ownership and control in markets is unhealthy for business and for consumers.

ACA has been arguing in the FCC’s retrans proceeding that shared services arrangements and other management contracts — and the resulting duopolies and triopolies — give broadcasters undue leverage in their retransmission consent dealings with cable operators.

In a statement, ACA also pointed out that Nexstar controls second stations in 13 markets through an umbrella agreement with Mission Broadcasting.

But, in a July 27 FCC filing, Nexstar said that its suit against Granite in no way means it opposes shared services agreements between stations or stations jointly negotiating for retransmission consent as the ACA had suggested.

Even a cursory review of its complaint against Granite “demonstrates that the ACA’s suggestion is without any merit.”

“The facts and legal theories underlying Nexstar’s lawsuit relate to the specific actions taken by Granite in the Fort Wayne DMA,” the Nexstar filing says. “As such, they do not, in any way, render any support for the ACA’s position.”

Nexstar also points out that Granite’s position in Fort Wayne is unique: “In no other U.S. DMA does any particular broadcaster have control over so many network affiliations.”

Nexstar’s suit alleges that Granite unfairly dominates the local TV ad market in Fort Wayne by controlling stations with five of the six major English-language broadcast networks: Fox, NBC, ABC, CW and MNT.

The suit came after Granite’s WISE snatched the Fox affiliation in Fort Wayne away from Nexstar’s WFFT while WFFT was locked in a dispute with Fox over the programming fees it would have to pay to remain an affiliatge.

WISE is an NBC affiliate that has been carrying MNT on a subchannel. As of Monday (Aug. 1), the subchannel also began carrying Fox’s primetime programming.

Under a shared services arrangement with Malara Broadcasting, WISE also operates ABC affiliate WPTA, which carries The CW on a subchannel.

Having forfeited the Fox affiliation, Nexstar is now operating WFFT as an independent. LIN Media owns the market’s CBS affiliate, WANE.

Responding to Nexstar’s FCC filing with one of its own today, ACA reiterated its interpretation of the Nexstar suit.

“Whether it likes it or not, or even admits it, Nexstar has filed an antitrust suit against a competing broadcaster that illustrates the point that coordinated action by TV stations to monopolize the local advertising market can produce largely identical anti-consumer harms as coordinated action in connection with retransmission consent,” ACA President and CEO Matthew M. Polka says in the filing.

“Although ACA has been making this point for some time, if it takes Nexstar’s antitrust suit to convince those who so far have declined to listen, so be it.”