The FCC's media Bureau has denied a retransmission consent complaint against Nexstar filed by cable operator HolstonConnect back in March, saying it was a disagreement over price.
Denying the complaint could help clear the way for the FCC's decision on the Nexstar-Tribune merger, which the Justice Department has already accepted, conditioned on station spin-offs.
HolstonConnect had alleged that Nexstar had failed to negotiate in good faith, which the FCC is empowered to enforce, for the carriage of Nexstar's ABC affiliate WATE Knoxville and WJHL-TV Tri-Cities (Bristol, Va., and Johnson City and Kingsport, both Tennessee).
HolstonConnect had alleged that Nexstar had refused to put forth more than a single, unilateral, proposal, had not responded to its counter or explain its silence, and refused to negotiate "at reasonable times and locations and otherwise acted in a manner that unreasonably delayed negotiations.
Holston had asked the FCC to order Nexstar to make the stations available at reasonable rates, disallow tying arrangements as a condition of carriage, sanction the broadcaster and make it pay legal fees.
But the bureau said that HolstonConnect failed to demonstrate Nexstar did not negotiate in good faith.
"At the outset, we reiterate our longstanding precedent that absent other factors, disagreement over the rates, terms, and conditions of retransmission consent – even fundamental disagreement – is not indicative of lack of good faith," the bureau said.
It also said that rather than a single, unilateral, offer, Nexstar twice offered to cut the price in multiple counterproposals.
HolstonConnect said Nexstar had not explained its rejection of its proposals beyond saying that it had closed deals for that price with others. But the FCC said that "explaining that a proposal is inconsistent with other comparable deals is a sufficient reason for rejecting a proposal."
The FCC good faith standard can apply if a demand is sufficiently outrageous, the FCC has said. HolstonConnect alleged that Nexstar's price was outrageous. "The record indicates that fundamentally, this dispute is a disagreement over price, which is the type of commonplace business disagreement that the Commission does not deem a violation of its rules," said the bureau. "HolstonConnect’s status as a small cable operator and new market entrant affords it no differential treatment, as our good faith negotiation standards apply equally to broadcasters and cable operators of all sizes."
The bureau urged the parties to go back to the table and work it out “in an atmosphere of honesty, purpose and clarity of process.”