Judge Backs Broadcaster in Retransmission Consent Ruling
Mediacom must drop Sinclair broadcast signals from its systems after Nov. 30 as Sinclair asked, a U.S. Dist. Court, Des Moines, judge said, denying the cable operator’s motion for a preliminary injunction (CD Oct 10 p5). Judge Robert Pratt’s order threw cold water on the cable operator’s claim that Sinclair violated the Sherman Act during retransmission consent negotiations. Retransmission consent reform advocates saw a silver lining in the ruling. Mediacom told the court it will appeal Pratt’s order and seek expedited handling by the 8th U.S. Appeals Court, St. Louis.
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Appealing Pratt’s order to the 8th Circuit will bring the argument to a panel of judges more experienced in antitrust litigation, said Mediacom Gen. Counsel Joseph Young. His company will continue its case in Des Moines, he said: “We spent a lot of time and money developing these theories, and we believe we've got some good theories. It’s important to bear in mind that the court did not make a decision on the merits.”
“Mediacom will not likely succeed in its attempt to establish an illegal tying arrangement because Mediacom is not being coerced into carrying” the CW- and MyNetworkTV- affiliated stations, Pratt wrote. Mediacom argued that by insisting on bundling carriage fees for CW and MyNetworkTV affiliates with retransmission consent for major 4 network- affiliated stations, Sinclair abused its monopoly on broadcast network programming. “Mediacom’s proposition that Sinclair has market power just because ’signals of local television broadcast stations are without close substitute’ is unpersuasive,” Pratt wrote.
That language bodes well for Sinclair in the pending antitrust litigation, Vp-Gen. Counsel Barry Faber told us. “Given the analysis provided by the judge, if I were them [Mediacom], I would be giving very serious thought to whether there is a case left to maintain,” he said. It has until Nov. 1 to tell subscribers if it plans to remove Sinclair’s stations from its lineup Dec. 1.
A court win for Sinclair could reinforce small cable operator efforts at congressional reform of retransmission consent laws, Sunflower Broadband Gen. Mgr. Patrick Knorr told us. “If the case ultimately doesn’t succeed, it means that existing laws allow for this,” and need to be changed, he said: “Our argument is that the way the rules work is unfair to consumers and to cable operators.” Sunflower and Mediacom are members of called Fair Access for Cable TV Subscribers (FACTS), an 11-member consortium of cable operators that is pushing for retransmission consent law reform (CD May 19 p15).
Mediacom didn’t tell other FACT members it planned to sue Sinclair before doing so, Knorr said. But it’s no surprise a cable operator would do so, he said: “The impact [of meeting broadcasters demands] is so great the cost of litigation is a better path.” But Judge Pratt pointed to a recent Mediacom SEC filing that said “Sinclair is seeking compensation that we believe to be in excess of what is appropriate, although that amount is not material to our results of operations or financial condition.”