No big surprise here, but the broadcasters fined in the Federal Communications Commission‘s first-ever finding of failure to negotiate retransmission consent in good faith want the regulator to cancel the levies, which total more than $10 million.

The FCC last month voted to deny an appeal of its decision that eight station groups failed to negotiate retransmission consent in good faith and has further decided to propose each of the 18 stations at issue over $500,000 each. It is the first time the FCC has ever issued a forfeiture order for a failure to negotiate retransmission consent in good faith, as its rules require.

Those station groups — Deerfield Media, GoCom Media, Howard Stirk Holdings, HSH, Mercury Broadcasting, MPS Media, KMTR Television, Second Generation of Iowa and Waitt Broadcasting — have jointly filed a response to the FCC, saying the agency was off base and the fines should go away. Some of the defendants also filed individually.

Mercury Broadcasting, for example, told the FCC that if it does not cancel the fine, it should reduce Mercury's penalty given that it owns only a single station, and citing “its demonstrated inability to pay and history of past compliance.”

Related: Small TV Stations Locked in Retrans Dispute With DirecTV

“AT&T has attempted for years to persuade the Commission to prohibit joint negotiations, but those efforts have been unsuccessful,” Deerfield told the FCC. “So when defendants sought in 2019 to jointly negotiate renewals of the 2016 agreements, AT&T tried to stymie their efforts.”

AT&T filed the complaint in June 2019 against the stations and groups, and the FCC said all of them failed to meet its standard for good-faith negotiations. All the groups were represented by consultant Duane Lammers of Max Retrans. AT&T sued Lammers, though that suit was thrown out.

In December 2019, the FCC's Media Bureau found that the stations had failed to negotiate in good faith with AT&T-owned DirecTV and U-verse TV. The FCC said in granting the complaint that the stations had unreasonably delayed negotiations, including by not responding to AT&T’s proposals.

AT&T pointed out in its complaint that all the stations involved were “managed and controlled by Sinclair Broadcast Group through some type of shared services agreement.” AT&T asked the FCC to 1) find that each station had violated the good faith negotiation requirement; 2) compel the stations still not negotiating in good faith to do so; 3) and fine them.

Related: AT&T: FCC's Max Retrans Smackdown Should Stand

The FCC granted the AT&T complaint in full, which included the proposed fines of $512,228 apiece for each station, the "statutory maximum for a single act or failure to act."

Rather than fine Lammers or the station groups, the FCC said it was appropriate to fine each station, saying " the harm to viewers is multiplied with each station that goes dark, regardless of the number of corporate parents involved in a carriage dispute, underscoring the importance of our focus on individual stations."

Good-faith negotiation complaints are not unusual, but the FCC upholding one and levying a fine was unprecedented. Such complaints have generally been dismissed for failing to show the negotiations were not in good faith, or dropped after the parties involved reach an agreement and publicly bury the hatchet, at least for the time being.

A federal judge dismissed with prejudice a six-month old lawsuit filed by AT&T against Max Retrans, adding that the broadcast TV consultant headed by former Nexstar Media chief operating officer Duane Lammers did not violate a 2016 non-disclosure agreement.

The original suit, filed in U.S. District Court for the Eastern District of Missouri in July, claimed that Max Retrans violated a non disclosure agreement it signed with AT&T in 2016, where it pledged not to disclose to third parties any sensitive information it became privy to when it had represented the telco in retrans deals.

According to the dismissal document filed with the court on Jan. 16, Max Retrans had earlier represented 11 stations -- whose names were redacted -- in a 2016 retrans negotiation. When those agreements came up for renewal in 2019, Max Retrans continued to represent the stations. AT&T had informed the consultant that its 2016 NDA was still in effect, to which Max retrans agreed.

AT&T claimed that in representing the stations in the renewal, Max Retrans used information, mainly rate data, which the telco claimed fell under the NDA.

In the dismissal document, U.S. Magistrate Judge Noelle Collins wrote that the definition of the term “third party” in the NDA was critical, adding AT&T’s assumption that the NDA would prevent stations negotiating jointly from sharing information would render the agreement “nonsensical.”

“Each of the ten station groups at issue here were parties to a single joint negotiation and thus not ‘third parties’ under the NDA,” Collins wrote. “At no point in Plaintiffs’ Complaint do Plaintiffs suggest that Lammers was negotiating exclusively on behalf of the [redacted] station group or any of the other station groups. Indeed, the Complaint is replete with allegations to the contrary.”

The stations in question were redacted in the suit, although it was revealed that nine of them went dark prior to the suit being filed. According to some sources familiar with the negotiations, Lammers represented about 20 stations that were locked in retrans disputes with AT&T and went dark on May 31. They subsequently reached agreements with AT&T after the Federal Communications Commission determined they were not negotiating with the telco in good faith. 

AT&T had been seeking compensatory damages, including lost subscriber revenue caused by Max Retrans’ breaches of contract and its misappropriation of AT&T’s trade secrets. 

“We’re reviewing the ruling and considering our options,” AT&T said in a statement concerning the dismissal.

AT&T has sued Max Retrans, a consultant to TV stations in retransmission consent negotiations and headed by former Nexstar executive Duane Lammers in federal court in St. Louis, claiming the consultant has violated non-disclosure agreements and disclosed company trade secrets.

The suit, filed Wednesday in US District Court for the Eastern District of Missouri, claims that Max Retrans signed an NDA with AT&T in 2016 pledging not to disclose any sensitive information it gleaned from the company when it represented the telco in some retrans deals.

Archives: 'Hammer Time' Profile of Duane Lammers from 2008

But, according to the lawsuit, Max Retrans used some of that information — particularly concerning rates AT&T paid similar stations in unrelated retrans agreements -- while it was representing independent stations in separate negotiations with the telco.

“In subsequent discussions with Lammers and, it has become clear that Max Retrans has breached, and without judicial intervention will continue to breach, the 2016 NDA,” AT&T said in its suit.

The name of the stations Lammers represented were redacted from the suit.

According to sources, Max Retrans is representing 20 stations that are currently locked in a retransmission consent dispute with AT&T. Those stations went dark to AT&T customers on May 31. 

Related: AT&T: Nexstar Pushes Retrans Meeting to Saturday 

AT&T is seeking compensatory damages, including lost subscriber revenue caused by Max Retrans’ breaches of contract and its misappropriation of AT&T’s trade secrets. 

“AT&T also seeks to recover retransmission consent fees related to any agreements AT&T may reach with station groups that have benefited from Max Retrans’ unlawful conduct, and further seeks punitive damages for Max Retrans’ willful and malicious unlawful conduct; attorneys’ fees; and declaratory and injunctive relief to prevent further unlawful disclosure of AT&T’s confidential information.”