FCC Denies Retrans Complaint Against DirecTV

Says unilateral zero-cash offer was not bad faith offer
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The FCC's Media Bureau has denied the retrans complaint filed by KFVE TV Honolulu licensee HITV against DirecTV.

KFVE has been off the satellite system since it failed to reach an agreement Oct. 19. HITV had elected to negotiate carriage--DirecTV had paid for the station previously--but balked when DirecTV wanted to carry it for free. DirecTV said it would not offer any money for carriage, so did not provide a counter offer to HITV's offer.

After several extensions from the original Aug. 31 contract expiration date, KFVE's signal was removed and HITV filed the FCC complaint alleging that DirecTV's single, take it or leave it, no compensation offer was a violation of the commission's rule that parties had to negotiate in good faith.

DirecTV told the FCC it had made another offer, just not one involving cash for carriage and said no money was justified given the lack of demand for the channel, a MyNetworkTV affiliate, and that it was providing value by carrying the station and extending its reach.

Related: KFVE Honolulu Off DirecTV

The FCC concluded that the single proposal did not indicate lack of good faith. "[A]bsent other factors, disagreement over the rates, terms, and conditions of retransmission consent – even fundamental disagreement – is not indicative of a lack of good faith. We agree with DIRECTV that nothing in the Act or our implementing rules requires that parties negotiating retransmission consent reach agreement." 

The FCC said HITV's contention that DirecTV's failure initially to provide a reason to the broadcaster for offering no money was not a violation of the rule, either. "Although it would have been more consistent with the spirit of the retransmission consent rules for DIRECTV initially to explain its decision not to provide any monetary compensation," the bureau said, "even in the absence of a counter-offer from HITV, our rules require no such explanation, and ultimately DIRECTV conveyed its reasoning to HITV."

As to HITV's claim that DirecTV was violating the totality of circumstances test, which covers conduct not specifically covered cited in the rule, the FCC said that was for outrageous proposals, not "commonplace disagreements.

The FCC did reject DirecTV's counter claim that HITV was not negotiating in good faith.

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