FCC Ban on Joint Negotiation of Retransmission Consent by Separately Owned, Top 4 Stations in the Same DMA Will Become Effective on June 18, 2014

Effective June 18, 2014, separately owned television stations that are ranked in the top four stations in a DMA will not be able to jointly negotiate retransmission consent with multichannel video programming distributors. Under revisions to Section 76.65 of the FCC’s rules, such joint negotiations are deemed to violate the individual station’s duty to negotiate retransmission consent in good faith.

Top 4 Stations

The new prohibition applies to joint negotiations by two or more Top 4 stations in a DMA that are separately owned. The FCC defines a “Top 4 station” as any station ranked among the top four stations in a DMA, based on the most recent all-day (9 a.m.-Midnight) audience share as measured by Nielsen Media Research. The prohibition does not apply to joint negotiations by commonly-owned stations or channels, regardless of market ranking.

There is no exception or grandfathering for Top 4 stations that have existing services agreements requiring joint negotiation of retransmission consent or providing for coordination in this regard in joint sales agreements, shared services agreements, or other similar agreements. As of June 18, 2014, such provisions will be unenforceable.

Prohibited Activities

The FCC’s prohibition of joint negotiations is not limited to formal agreements between Top 4 stations. The FCC has broadly defined “joint negotiations” to include coordinated activities relating to retransmission consent negotiations. The following activities are specifically prohibited:

• A Top 4 station may not delegate to a separately owned Top 4 station in the DMA the authority to negotiate or approve a retransmission consent agreement.
• Top 4 stations in a DMA that are separately owned may not delegate to a common third party the authority to negotiate or approve a retransmission consent agreement.
• Top 4 stations in a DMA that are separately owned may not make any informal, formal, tacit, or other agreement and/or engage in conduct that signals or is designed to facilitate collusion regarding retransmission terms (such as pricing) or agreements.

Impact on Existing Retransmission Consent Agreements

The new rule does not invalidate existing retransmission consent agreements that were completed through joint negotiation. Retransmission consent agreements signed prior to June 18, 2014 will remain in effect until they expire or are terminated by the parties.

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If you have any questions concerning the application of the new rule, please contact any attorney in our office.