FCC Proposes Record $2.25M Fine on Cable Op for Retrans Violation

The FCC's Media Bureau has proposed fining Houston, Texas cable operator TV Max a whopping $2.25 million for violating the FCC's retransmission consent rules, which the FCC confirms is its largest ever proposed retrans fine.

TV Max had argued that it fell under the so-called MATV exception that provides that in some "limited" circumstances, cable ops do not have to pay retrans consent if they are receiving signals with a master antenna television facility (MATV) and delivering them to building residents.

The FCC concluded that because TV Max received the signals at an off-site headend, they were not entitled to the exemption.

Four major TV broadcasters -- Fox, Univision,Post-Newsweek 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 Media Bureau began an investigation of TV Max (which does business as Wavevision), warned the company it appeared to have "willfully and repeatedly violated, and continued to violate, the Commission's retransmission consent rules" and ultimately concluded this week that it had indeed been retransmitting station signals without permission.

The FCC has given the company 30 days to stop delivering those signals without permission.

And the $2.25 million price tag? "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 warned TV Max about its actions," the Bureau said. Max TV had said it was converting its MDU 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 FCC said that even if it had completed that MDU migration, TV Max would still be in violation.

"[W]e find that TV Max's unlawful retransmission of the stations' signals over its cable system to its cable subscribers is not cured by its installation of MATV systems on its MDU buildings. The MATV exception pertains only to broadcast signals received by master antenna television facilities. The record shows that TV Max is retransmitting the stations' signals from an off-site (central) headend that serves multiple MDUs rather than exclusively using the MATV antennas at the individual buildings for all of its customers."

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.