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TDS alerts FCC about Nexstar impasse, retransmission-consent provisions

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TDS alerts FCC about Nexstar impasse, retransmission-consent provisions

Telephone and Data Systems Inc. alerted Federal Communications Commission about the retransmission-consent increase Nexstar Media Group Inc. is seeking and how the distributor would incur additional fees should the station operator complete its acquisition of Tribune Media Co.

In a Jan. 4 missive addressed to FCC Chariman Ajit Pai, TDS wrote that it has been in active negotiations with Nexstar since their contract expired on Dec. 31, resulting in TDS' video customers losing access to the broadcaster's stations in eight states.

Although both parties have moved off their initial positions, Nexstar is still seeking a hike of 129%, a level that is "too expensive and unreasonable for our customers and communities to absorb," Senior Vice President of Corporate Affairs Andrew Peterson wrote.

As the carriage deadline approached, Nexstar, within minutes, denied TDS' request to extend the contract so that its customers would not be caught in the middle, Peterson added.

The letter also informs the FCC that Nexstar's retransmission proposal contains provisions should its acquisition of Tribune be consummated that lower-rated stations would realize higher rates, without negotiation, resulting in Nexstar adding another $75 million in fees.

"There is no requirement that anything change for these stations that ratings increase or additional meaningful local content enter their programming," Peterson wrote. "Nexstar simply, and unilaterally, will require TDS, as one of the providers carrying Tribune stations, to increase payments to Nexstar."

Valued at $6.4 billion, including debt assumption, Nexstar's deal for Tribune, if consummated, would make the former the nation's largest station operator, supplanting Sinclair Broadcast Group Inc.

The letter, which copied the FCC commissioners, also said Nexstar is seeking to shift its business risk associated with lost network affiliation onto TDS by preserving the attendant retrans fees, even if stations lose their national affiliation.

"TDS cannot agree to this term to secure Nexstar’s profits. This is just another example of the types of provisions large broadcasters try to impose on small providers like TDS."

A TDS spokeswoman said the company on Jan. 4 received confirmation that Pai's office received its correspondence. Nexstar had not responded to queries seeking comment by publication time.

Having failed to reach a deal, Nexstar stations, including those affiliated with ABC (US), CBS (US), FOX (US) and The CW (US) have been unavailable to TDS video subscribers in Colorado, Indiana, Nevada, New Mexico, Oregon, Tennessee, Texas and Utah thus far in 2019.

The letter also noted that Nexstar is "embracing the increasingly popular strategy of withholding marquee sports programming to manipulate negotiations."

If the blackout continues, TDS subscribers would miss NFL Wild Card playoff action this weekend. ABC is simulcasting ESPN (US)'s coverage of the Houston-Indianapolis game at 4:35 p.m. ET on Jan. 5, while FOX is airing the Dallas-Seattle match-up in prime time that night. CBS will air the Baltimore-Los Angeles Chargers contest on Jan. 6 at 1:05 p.m. ET.

Tribune is engaged in its own carriage contretemps with Charter Communications Inc. After reaching a short-term extension ahead of the Dec. 31 expiration of their contract, the parties failed to conclude a new deal on Jan. 2, leaving 6 million Charter video subscribers without access to 33 Tribune stations in 24 markets and 14 million of the cable operator’s video customers unable to watch cable network WGN America (US).