The FCC’s Media Bureau has sided with DirecTV after Hawaiian MyNetworkTV affiliate KFVE-TV complained that the satellite operator didn’t negotiate with it in good faith.
MCG Capital Corporation and Raycom Media jointly own HITV, which operates KFVE-TV. The station has been off AT&T-owned DirecTV since Oct. 19 amid stalled broadcast retransmission licensing talks. DirecTV has argued that there is little demand for the station, and it has refused to pay fees to carry KFVE-TV’s signals. HITV launched a complaint with the FCC in November, alleging that DirecTV negotiated in bad faith.
The FCC responded with a ruling (Word doc) Monday:
“Rather than provide a counter-offer to DirecTV’s initial proposal, HITV requested DirecTV to provide another proposal that would be workable for HITV. We agree with DirecTV that it is not obligated to negotiate against itself,” the Media Bureau’s order read.
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“After HITV filed the complaint, DirecTV made another, albeit similar, carriage proposal, and it explained why competitive marketplace considerations did not support an offer of monetary compensation to HITV,” the order continued. "Once DirecTV put forth its initial proposal, however, it was not required to put forth a subsequent proposal in the absence of a responsive proposal from HITV. “
The FCC ruling is being observed closely by pay TV operators, who are pushing back against skyrocketing broadcast retransmission licensing costs.
According to research company SNL Kagan, total retrans revenue reached $9.3 billion in 2017, up from $7.9 billion in 2016. The firm said retrans is expected to generate $12.8 billion for broadcasters by 2023 at the current growth rate.