MATV Operator Faces Possible $2.25 Million FCC Fine for ‘Egregious’ Retrans Violations
Lengthy and repeated retransmission consent violations harming six TV stations owned by Disney, News Corp. and other major broadcasters led FCC members to approve a proposed $2.25 million fine against a master antenna operator. Affiliated companies known as TV Max and by other names violated retrans rules for more than a year in the Houston market, and continued after the Media Bureau in December (CD Jan 3 p11) required the firm to stop the alleged violations, said a commission notice of apparent liability Tuesday. The NAL said that after transactions to “evade responsibility for its ongoing violations,” the “flagrant,” “longstanding” and “egregious” violations didn’t lead to an even higher proposed fine because the company has “only” 10,000 customers, operates in a single market and isn’t part of a larger cable operator.
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The company also owes the city of Houston money for unpaid video-franchise fees, city officials told us. The master antenna exemption from retrans rules TV Max cited doesn’t apply because the company served some of its multiple dwelling unit subscribers from video TV Max got from a cable headend not located in the MDUs, said the NAL. Retrans complaints by ABC, licensee of KTRK-TV Houston; Fox, licensee of KTXH and KRIV Houston; Washington Post Co.’s Post-Newsweek, with KPRC-TV Houston; and Univision, with stations in the market of KXLN Rosenberg and KFTH Alvin, also were a factor in a Texas Public Utilities Commission proceeding, some of those broadcasters have said (CD April 4 p13). TV Max’s lawyer, Carl Kandutsch, declined to comment on the NAL because he said he hadn’t seen it, and had no further comment when we sent him a copy (http://bit.ly/17cBHlu).
TV Max owes Houston $501,105 in unpaid video-franchise fees, said Senior Assistant City Attorney John Helms. A related entity operates in the city under a 2005, 15-year municipal franchise, and an affiliate’s request for a statewide cable franchise was opposed by the city, said another senior assistant city attorney, Melba Pourteau. That firm then withdrew the request, she said. “They had actually been so much in default” that Houston sued TV Max, getting an agreement where the city said it wouldn’t yank the franchise if the company paid up all outstanding fees, said Pourteau.
"We've never had a company that’s been this non-compliant” by not paying franchise fees, “in trouble with the FCC” and facing other legal hurdles, said Pourteau. “That’s just unheard of.” Comcast is the cable operator in Houston, a city which also is served by AT&T’s U-verse pay-TV service, said Pourteau. The city’s franchise requires TV Max to comply with all state and federal rules, she noted.
TV Max’s carriage of the six stations didn’t meet the master antenna exception because those broadcast signals came from an off-site headend “rather than through the on-site MATV system” at multiple dwelling units, said the NAL. “TV Max’s violation was particularly flagrant because it knew that it could not possibly qualify for the MATV exception during this nearly seven-month time period,” in Jan. 1-July 26, 2012, with the later date being when the MATV systems were installed in all buildings served by the company, said the FCC. Even at that point, the company said some of the signals came from its cable headend, the agency said. “Our goal is to ensure that the forfeiture amount is sufficient to act as a deterrent to future violations and to ensure that the forfeiture is not considered merely an affordable cost of doing business.”
The company must “immediately” comply with retrans rules, said the NAL. It required a sworn statement within 30 days “describing in detail” how Section 325 of the Communications Act will be followed, so that retrans rules aren’t broken. “Because TV Max is providing broadcast signals received at its off-site cable headend, it must obtain consent to retransmit the broadcast signals,” said a commission news release Tuesday (http://bit.ly/14876Ei). It was “always clear” to Fox Networks Group that TV Max, which also is called Wavevision, was violating the act “by retransmitting the signals of KTXH and KRIV,” said a spokesman for the broadcaster. He said the FCC sent “a very strong message to those who illegally appropriate our broadcast signals.” Other broadcasters had no comment.