Sinclair: Consolidation Is Not Retrans Blackout Culprit

Broadcaster argues MVPDs are in stronger position to weather impasses
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Sinclair Broadcast Group slammed cable and satellite companies for suggesting in FCC comments that eliminating the 39% cap on a broadcast group owners national reach would lead to more retrans blackouts.

That came in reply comments to the FCC's inquiry into whether to raise, lower, or maintain the cap.

Sinclair told the FCC that those operators have conflated their own interests with those of the public.

Citing arguments satellite TV operator Dish Network made against raising or scrapping the cap, the broadcaster, which is benefitting from the current 50% UHF discount's de facto cap-doubling for those stations, said the 17 blackouts involving Dish in 2015-2016 were with 17 different station owners, undercutting the argument that consolidation is to blame.

"Because a broadcaster clearly need not achieve nationwide reach to find itself in a negotiating impasse with Dish," said Sinclair, "Dish has failed to show how such blackouts would be likely to increase in the absence of the national cap."

Sinclair also said that blackouts are hardly uniquely harmful to MVPDs and that broadcasters are likely to incur much larger revenue losses from such disputes than are MVPDs and so are highly motivated to do deals.

"MVPDs — particularly the top 10 that account for approximately 95% of subscribers nationwide — are typically in a much better position than broadcasters to absorb whatever small subscriber losses they suffer from a supply disruption," said Sinclair, adding yet another term to the retrans lexicon, alongside "impasse" "signal-pulling," "signal takedown" and "blackout."

Even if eliminating the cap would increase retrans fees, that is not necessarily anti-consumer, said Sinclair, noting that those fees help pay for local news and other programming.

"The purpose of the retransmission-consent regime is to allow the marketplace, not the commission, to determine whether retransmission fees are justified and, when they are, the appropriate amount of those fees," Sinclair told the FCC.

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