Both Sides of Nexstar/Hawaiian Telecom Dispute Appeal NAL to FCC

Both sides in a dispute involving alleged violations of good faith retransmission consent rules between Nexstar and Hawaiian Telecom want the full FCC to overturn aspects of a Media Bureau $720,000 notice of apparent liability issued against Nexstar last month. In the NAL, the bureau agreed with Hawaiian Telecom that Nexstar violated FCC rules by proposing renewal terms that would have barred HT from filing complaints with the FCC, but rejected as being outside the FCC’s authority HT’s initial claims that the broadcaster also violated the rules by refusing to extend an existing retrans agreement. The FCC can’t order a broadcaster to grant retransmission consent, the NAL said. “The Bureau’s decision incorrectly concludes that in the absence of authority to order a broadcaster to grant retransmission consent, the Commission cannot review bad faith conduct that results in a blackout,” HT said in its application for review Thursday. That decision “will serve as dangerous precedent” that “will likely lead to more frequent blackouts because the very existence of a blackout will exempt the broadcaster’s conduct from Commission scrutiny,” HT said. In its own application for review filed Friday, Nexstar argued the bureau shouldn’t have found any good faith violations and said the proposed $720,000 forfeiture is too high and should be canceled or reduced. The provisions against filing complaints with the FCC were part of Nexstar’s proposal to settle HT’s initial good faith dispute concerning Nexstar’s refusal to extend an existing retrans agreement, Nexstar said. That proposal was “eminently reasonable, and any such settlement would have been deficient without a prohibition on further litigation of the matter,” the broadcaster said. The proposed forfeiture “far exceeds the Bureau’s delegated authority” was arrived at in an “illogical way” by treating a contract proposal as a continuing violation from the date it was first proposed until the date the contract was executed, Nexstar said. Such a policy “perversely incents future parties to delay negotiations in the interest of elevating the potential liability to their counter-parties,” Nexstar said. The NAL also increased the forfeiture using “a draconian upward adjustment that is based on no apparent rationale other than that Nexstar is a large and successful broadcaster,” the filing said. “Even if the Bureau could justify a conclusion that a violation occurred,” the proposed forfeiture “far exceeds the gravity of the conduct, not to mention the Bureau’s delegated authority and notions of reasoned decisionmaking,” said Nexstar.