Significantly, to protect local TV competition, the FCC's media ownership rules allow Sinclair to own only one of the four most highly rated stations in a market. In Tallahassee, Sinclair is using the Cunningham agreement to skirt the FCC's one-to-a-market restriction by owning the NBC affiliate but controlling the retrans rights of the FOX affiliate in a sidecar deal with Cunningham. In Gainesville, Fl., Sinclair plans to bypass the FCC's rule again by owning the CBS station outright but controlling the retrans rights of the NBC affiliate in a similar business sidecar deal with Cunningham. Sinclair's Tallahassee and Gainesville transactions are awaiting FCC action.
More importantly, by colluding rather than competing for retransmission consent fees, the Sinclair and Cunningham stations will be able to extract fees from pay-TV providers and consumers far in excess of what each station could get on its own.
"The FCC cannot and should not stand idly by while Sinclair increases its already prodigious market power over retransmission consent in local TV markets through coordination agreements with stations owned separately in name only," ACA's Polka added.
ACA's latest objections to Sinclair's Tallahassee and Gainesville transactions were set forth in comments filed Dec. 2 with the FCC. ACA continued to urge the FCC to consider these transactions as blatant evasions of FCC rules. Because these Sinclair deals raise novel and important questions of law, fact, and policy, ACA requested referral of the matter to the five FCC Commissioners for en banc disposition, instead of the Media Bureau's acting upon the applications on delegated authority.
ACA has demonstrated that these transactions would violate the intent of the FCC's local television ownership rule. Sinclair and Cunningham cynically designed the transactions to attempt to observe the letter of the FCC's rule, while clearly skirting its purpose and intent by allowing two nominally separately owned highly-rated Big Four affiliates in each affected market to coordinate their retransmission consent negotiations as if under common ownership.
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