Telco to FCC: OTT 'Retrans' Fee Is Out of Line

(Image credit: Future Media)

Cincinnati Bell, doing business as Altafiber, has filed a retransmission consent complaint against Cox Media/Apollo's WHIO-TV, the CBS affiliate in Dayton, Ohio, and the top station in the market, for allegedly failing to negotiate in good faith, as FCC rules require, by trying to charge a fee for over-the-top video streamers as well as traditional cable subs.

Cincinnati Bell says that would constitute a "crippling" fee.

The telco, which is trying to launch a fiber to the premises (FTTP) video service combining cable and broadband, says its issue is that the station won't grant retrans rights unless it gets a per-sub fee from most non-cable as well as cable subs, even though the former are not getting retransmitted TV station signals. "Imposing retransmission consent fees on broadband subscribers, to whom no retransmission is made, would not only increase the cost of broadband service but it has the immediate impact of foreclosing competition," it says.

The telco says it has been trying to secure retrans rights since 2019.

According to Cincinnati Bell, "Cox confirmed that even if such a subscriber merely streamed YouTube videos or purchased a Netflix subscription, it demands payment of retransmission consent fees despite the absence of any retransmission by Altafiber."

The telco points out that WHIO has not asked for similar fees from other cable/broadband operators in the market, and while it concedes Cox could be testing the waters for doing so in the future, why it is doing so is not the point, but the effect of doing so, which is to hinder competition, is an exercise of market power that runs afoul of the good faith standard.

Cincinnati Bell says that without rights to the top station in the market, it will have to scale back or scrap construction of its planned FTTP system to 135,000 homes in the Dayton DMA. That means not offering choice in cable and high-speed broadband to a community with a median income of only $32,540, where 30% live in poverty and almost half the population are people of color, just the sort of community that needs choice. Charter is the cable/broadband provider the telco would be going up against in the market.

"Both Congress and the Commission have repeatedly asserted the need for ubiquitous availability of affordable ultra-high-speed broadband service," Cincinnati Bell says in its complaint. "This is exactly what Altafiber seeks to accomplish with its plan to invest hundreds of millions of dollars in Dayton, only to be derailed by an extortion demand."

Cincinnati Bell has asked the FCC order that Cox:

1. "Cannot require, directly or indirectly, payment of retransmission consent fees related to subscribers who do not purchase cable television service from Altafiber;

2. "Cannot mandate or restrict Altafiber’s fee or billing structure or disclosures for cable service so long as Altafiber does not disclose to subscribers the amount paid toCox for retransmission consent;

c. "Engage in good faith negotiations with Altafiber to attempt to resolve remaining open issues; and

d. "Cox is prohibited from engaging in any effort to circumvent the effect of the order, including, but not limited to, engaging in retaliatory pricing of its retransmission consent fees."

A Cox Media spokesperson had not returned a request for comment at press time.

Retrans 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.

But last July, the FCC upheld a record $10 million fine against Sinclair-managed stations. ■

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.