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Cable Firm Hit With Record Retrans Fine

WASHINGTON — The Federal Communications Commission has made it official. It is fining Houston-based cable operator TV Max $2.25 million for violating retransmission- consent rules, a penalty the agency has said is its largest ever for such a violation.

The commission proposed the fine over a year ago, but had to give TV Max a chance to defend itself before the affirmation came last week.

TV Max, which does business as Wavevision, had argued that it fell under the so-called MATV exception that, in some “limited” circumstances, tells cable operators they do not have to pay for retransmission if they are receiving signals with a master antenna television facility and delivering them to building residents.

The FCC concluded that because TV Max received the signals at an off-site headend, the exemption did not apply.

Four major TV broadcasters — Fox, Univision, Post-Newsweek Stations and ABC — had complained that TV Max was continuing to retransmit their signals without permission, and thus without payment, after their agreements had expired at the end of 2011 and no new agreements had been reached.

The FCC’s Media Bureau began an investigation of TV Max and warned the company it appeared to have “willfully and repeatedly violated, and continued to violate, the commission’s retransmission consent rules.”

The agency gave the company 30 days to stop delivering those signals without permission. TV Max countered that the fine should be lowered or cancelled.

TV Max has said the FCC overstated the time period during which it was retransmitting the stations without consent or payment, that it did not benefit financially from the retransmission, that it had no prior history of offenses and said it can’t pay the fine, which is out of proportion to previous fines.

The FCC accepted none of those, branding them at turns disingenuous or inaccurate, and said it had already taken into account TV Max’s ability to pay in the fine it did impose (see below).

Why the hefty fine? “The commission found TV Max’s violations to be very serious, warranting a substantial penalty, given the longstanding unauthorized carriage that continued even after the Bureau [in 2012] warned TV Max about its actions,” the bureau said.

TV Max had said it was converting its multiple- dwelling-unit service to master antenna reception from the headend, but the FCC pointed out that as of Jan. 1, 2012, not even half of its 245 buildings had been converted.

The fine could have been much worse, the FCC said last week. “TV Max’s violations occurred for more than 365 days and involve six separate stations. A straightforward application of the base forfeiture amount would have resulted in a proposed forfeiture of $16,425,000.”

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.