FCC Denies Challenge to DirecTV's Retrans Complaint Win

DirecTV satellite dish
(Image credit: Future)

The Federal Communications Commission has upheld the collective multimillion-dollar fines against a number of TV stations for violating its mandate that retransmission negotiations be conducted in good faith, saying a challenge to that decision failed both on procedural grounds and on the merits.

AT&T, the former owner of DirecTV, had filed the good-faith complaint against Deerfield Media, GoCom Media, Howard Stirk Holdings, HSH, Mercury Broadcasting, MPS Media, KMTR Television, Second Generation of Iowa and Waitt Broadcasting, all of which the FCC said failed to meet its standard for good faith negotiation. All the groups were represented by Duane Lammers of Max Retrans.

The FCC's Media Bureau upheld the complaint, finding that the stations had persistently refused to negotiate, unreasonably delayed those negotiations and failed to respond to AT&T proposals. It told the parties to continue to negotiate, this time in good faith.

Also: Broadcasters Balk at Retrans Fines

The stations appealed the decision to the full commission, which upheld it and fined the stations $512,228 apiece for willfully and repeatedly violating the commission’s good faith negotiation requirements."

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 such a complaint and levying a fine was unprecedented. Such matters 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.

The stations then appealed the decision and looked to eliminate or at least reduce the fines. It is that appeal that the full commission this week rejected on procedural grounds and merit.

The stations had argued that the decision violated their Fifth Amendment right to due process because they lacked notice both that their conduct was a violation of good faith and the magnitude of the potential penalty.

The FCC dismissed that argument, saying they had "failed to raise their constitutional due process arguments earlier in this proceeding though they could have done so," which was a procedural error. The FCC pointed out that, "a petition for reconsideration will be granted only if the petition raises facts or arguments that could not have been raised sooner." But it added that, even if they had raised them, on the merits, "the Petition offers no facts or arguments that would warrant altering the Commission’s findings or reducing the amount of its forfeiture."

"Contrary to defendants’ assertion, the commission did not adopt a new interpretation of its longstanding good-faith rule; it simply applied the straightforward language of that rule to the facts in this record," the FCC said. ■

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.