MIDDLETOWN, N.Y.–LAWFUEL – Law News Network –MEDIACOM COMMUNICATIONS CORPORATION (NASDAQ: MCCC) today released a copy of a letter written by Rocco B. Commisso, Chairman and CEO, to members of Congress who represent Mediacom’s employees and customers in 23 states.
The letter addressed yesterday’s announcement by the Media Bureau of the Federal Communications Commission that it was not willing to order Sinclair Broadcast Group, Inc. (NASDAQ: SBGI) to restore its broadcast stations’ signals to 2 million viewers in 700,000 households in small communities across America while the full Commission considers Mediacom’s claim that Sinclair has unlawfully failed to negotiate with Mediacom in good faith to reach a fair and non-discriminatory deal.
The letter calls on key Senators and Congressmen to urge the FCC’s Chairman, Kevin Martin, and the other Commissioners to honor the Commission’s mandate to protect the public interest by exercising its broad remedial authority under the Communications Act to secure, at the very least, interim carriage of the Sinclair stations on Mediacom cable systems. In addition, the letter calls for Congressional investigations and hearings regarding retransmission consent abuses and the FCC’s handling of the Sinclair-Mediacom dispute.
According to the letter, Sinclair has:
Singled out Mediacom and its customers for discriminatory treatment, rejecting Mediacom’s multiple offers to pay prices based on what Sinclair charges comparable cable operators and rejecting consideration consistent with what Mediacom pays the 475 stations with which it has successfully negotiated retransmission consent.
Repeatedly raised its price demands even as Mediacom attempted to close the gap between the parties and reneged on commitments made during negotiations.
Participated in an anticompetitive arrangement with DIRECTV, Mediacom’s largest competitor, to induce (through cash payments) Mediacom’s customers to cancel their service and switch to DIRECTV (even though such service ultimately is more costly to the customer).
Misrepresented Mediacom’s financial condition to the investment community in an attempt to coerce Mediacom to give in to Sinclair’s unreasonable demands.
Repeatedly rejected Mediacom’s requests that this dispute be resolved by binding arbitration before an independent, impartial arbitrator with no prior stake in the dispute.
Refused to agree to allow interim carriage as the parties continue to negotiate, even though Mediacom has offered to pay cash during the interim period while, on the other hand, Sinclair just yesterday granted Time Warner the second of two extensions preventing a shutoff of Sinclair stations in Time Warner systems.
Mediacom also points out that numerous members of Congress, including the entire bi-partisan Iowa Congressional Delegation, have strongly recommended to the FCC and Sinclair that the public interest would be served by binding arbitration and continued carriage of the stations. To date, Mediacom says, the FCC and Sinclair have ignored these entreaties.
According to the letter, Mediacom’s FCC lawyers disagree with the Media Bureau’s position that it lacks the authority to order interim carriage or binding arbitration. Mediacom also points out that the harm to the public of the continuing service interruption is significant and Sinclair would not be hurt since Mediacom is willing to pay for interim carriage.
The full text of the letter is attached.
Mediacom Communications is the nation’s 8th largest cable television company and one of the leading cable operators focused on serving the smaller cities and towns in the United States. Mediacom Communications offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service.
Below is the letter written by Rocco B. Commisso, Mediacom Chairman and CEO, to members of Congress who represent Mediacom’s employees and customers in 23 states:
Dear Senators and Congressmen:
Yesterday afternoon (on the eve of a three day holiday weekend), the FCC’s Media Bureau issued an order denying Mediacom’s request that it be given interim carriage rights to allow Mediacom to restore Sinclair’s stations to the cable line-ups of 2 million viewers in 700,000 households in small communities across America while the full Commission considers the lawfulness of Sinclair’s refusal to negotiate with Mediacom on a reasonable, non-discriminatory basis.
Congress entrusted to the FCC the responsibility to protect the public and gave it ample authority under the Communications Act to carry out that obligation. By denying Mediacom’s request for interim carriage, the Bureau has failed to carry out this fundamental, Congressionally-mandated duty.
On behalf of Mediacom’s affected subscribers, employees and shareholders, I write to ask you to support the immediate restoration of Sinclair’s signals to our customers and your constituents while we fight the FCC’s actions through the appeal process.
It is our belief that any objective observer would have to concede that Sinclair’s treatment of Mediacom and its customers has been unreasonable, unfair, and unlawful. Among other things, Sinclair:
Has singled out Mediacom and its customers for discriminatory treatment as evidenced by:
— rejecting Mediacom’s offer to pay prices that Sinclair charges comparable cable operators;
— rejecting amounts consistent with what Mediacom pays the 475 stations with which it has successfully negotiated retransmission consent;
— rejecting Mediacom’s offer to pay the amount ultimately agreed to by Sinclair and Time Warner in their current negotiations;
— Refusing to agree to allow interim carriage while the parties continue to negotiate, even though Mediacom has offered to pay Sinclair cash consideration and even though, just yesterday, Sinclair granted Time Warner the second of two such extensions in the last two weeks.
Has repeatedly raised its price demands even as Mediacom attempted to close the gap between the parties and reneged on commitments made during negotiations.
Over the past several months, has participated in an anticompetitive arrangement with DIRECTV, Mediacom’s largest competitor, aimed at inducing (through cash payments) Mediacom’s customers to cancel their service and switch to DIRECTV (even though such service may be ultimately more costly to the customer). Significantly, Sinclair has engaged in this campaign only against Mediacom and is not taking similar measures against other cable operators with which it is currently negotiating, such as Time Warner or Comcast.
Misrepresented Mediacom’s financial condition to the investment community in an attempt to coerce Mediacom to give in to Sinclair’s unreasonable demands.
Has refused to accept Mediacom’s repeated offers to resolve this dispute through binding arbitration.
Repeatedly made take-it-or-leave-it demands and refused to make themselves available for discussions. For example, as recently as last night, Sinclair indicated that it cannot resume negotiations with Mediacom until the middle of next week because its general counsel is not available and its CEO is going goose-hunting.
In its orders favoring Sinclair, the FCC has stated that it lacks the authority to order interim carriage. Yet, the Media Bureau was prepared to issue precisely such an order at the end of November and did not do so only because Sinclair capitulated to pressure and granted Mediacom a short-term extension (which expired January 5, 2007). Over the past several weeks and days, numerous members of Congress, including the entire bi-partisan Iowa Congressional Delegation, have expressed to the FCC and to Sinclair that the public interest would be served by binding arbitration and interim carriage while the full Commission considers Mediacom’s case. Yet both Sinclair and the FCC have ignored these entreaties.
The decisions made by the FCC favor a party that not only has caused damage to Mediacom and its 4,200 employees in small communities in 23 states, but severely inconvenienced tens of thousands of lower-income households or senior citizens who Mediacom serves with its relatively inexpensive basic tier of cable service, and who may not have an over-the-air alternative because of Sinclair’s weak UHF signals in some of our rural markets.
During the past 3 months of our very public dispute with Sinclair, the only thing we ever asked for is a market-driven, non-discriminatory deal that is fair to everyone. Over this period, we have put on the table various proposals to achieve those objectives, including those that we offered the past three days. Unfortunately, as we have consistently increased our financial offers, Sinclair has responded with increasing demands both in price and non-price terms. In fact, the costs to Mediacom represented by Sinclair’s current demands are significantly higher than what they were as recently as September 2006.
Through our filings at the FCC, the Media Bureau has been made aware of these and the other abusive tactics utilized by Sinclair to strong-arm Mediacom into a deal that, if accepted, will set the stage for dramatic increases in basic cable rates nationally and put Mediacom and smaller cable operators at a competitive disadvantage for video services with satellite companies, which dwarf the size of the entire American Cable Association membership.
To put it more clearly: if the FCC’s approval of Sinclair’s actions is allowed to stand, other broadcasters will follow suit and the result will be the imposition of a $6 billion annual tax on the American public to watch “free” over-the-air television, a burden that will fall disproportionately on those least able to afford it and on rural Americans.
While Mediacom sought intervention from the FCC to enforce Congress’ intent that retransmission consent not be abused by broadcasters, Mediacom also has been doing all that it can to protect the public, including handing out tens of thousands of free rabbit-ear antennas to its subscribers, even though doing so actually helps Sinclair (by keeping up its advertising viewership). However, it is time for the FCC to step up and fulfill its responsibility to protect Mediacom’s customers, your constituents and, indeed, all subscription television customers across the country.
It is imperative that you immediately write to Chairman Martin and each of the other Commissioners to urge them to fulfill their public duty to protect the interests of the public by taking action to cause Sinclair to reauthorize carriage of its stations on Mediacom’s cable systems.
In addition, I ask you to support investigations and hearings regarding retransmission consent abuses and the FCC’s handling of such abuses. I would gladly welcome the opportunity to testify in connection with such investigation or hearings to ensure that the full story of the Mediacom-Sinclair dispute is made part of the public record.
Thank you for the support you provided Mediacom in the past and hopefully in the immediate future on this very important matter to your constituents and the American public.
Best regards,
Rocco B. Commisso
Chairman and CEO
cc: U.S. Senate
Chairman Daniel K. Inouye
Co-Chairman Ted Stevens
U.S. House of Representatives
Chairman John D. Dingell
Chairman Edward Markey
Ranking Member Joe Barton
Ranking Member Fred Upton
