Sinclair Disputes Mediacom Retrans Claims

In a letter to FCC Chairman Julius Genachowski, Sinclair Broadcast Group EVP-General Counsel Barry Faber, takes issue with comments by Mediacom CEO Rocco Commisso in the commission’s retransmission consent proceeding on behalf of “smaller cable operators.”

“The heart of Mr. Commisso’s plea for government intervention is that broadcasters are able to assert too much leverage over the small cable operators, a thesis that is facially suspect given that broadcast stations, despite providing close to 50% of all ratings (and generally around 95 of the top 100 shows each week), are reported to receive well less than 10% of the total programming expenditures by cable companies.”

Faber continues: “I respectfully suggest that Mediacom be asked to open up its books so the FCC and the public can understand how much of monthly subscription fees to to purchase rights to low-rated programming on cable channels that most subscribers infrequently or never watch.

“Moreover, Mr. Commisso’s statement that retransmission rates are escalating at a pace that far outstrips inflation should be seen as the red herring that it is, given that rates started from zero as the result of (1) prior government regulaitons permitting carriage of broadcast stations by cable companies without consent or direct payment and (2) the exercise of monopoly power by cable companies for many years following the elimination of such regulation.

“It is a rare broadcaster indeed that can withstand the pressure of threats by oligopoliths like Comcast (market cap of $82 billion and more than 22 million cable subscribers) and Time Warner Cable (Market cap of $25 billion and more than 12 million cable subscribers) to remove stations from their lineups absent price capitulation from the broadcaster.

“As to Mr. Commisso’s specific suggestion that small cable companies be permitted to have large cable companies negotiate on their behalf, I note that this practice already exists where an ongoing relationship exists between the cable providers; Time Warner Cable, for example, routinely negotiates on behalf of Bright house Networks, a company owned by a partnership in which Time Warner Cable has an interest.

“To allow for the expansion of this practice to permit joint negotiation where no other relationship exists is not only unnecessary given the facts, but would require extensive antitrust analysis to make sure no laws are broken,” Faber concluded.