altafiber Files Retransmission Consent Complaint Against Cox; Claims Cox Wants Payment Of Retransmission Consent Fees For Non-Cable, Broadband-Only Subscribers

April 4, 2022 – Cincinnati Bell Extended Territories LLC, dba altafiber has filed a Verified Retransmission Consent Complaint For Enforcement Of Obligation To Negotiate In Good Faith against Miami Valley Broadcasting Corporation (WHIO-TV), a CBS-affiliate managed by Cox Media Group.[1]

The dispute involves altafiber’s attempt to obtain a retransmission consent agreement with the CBS-affiliate in the Dayton DMA, the location of altafiber’s new fiber-to-the-premises (FTTP) communications network that will provide “cable television and ultra-high-speed broadband service” to “135,000 households.”[2]

Here is how altafiber describes its complaint in the first line of the initial summary of the filing:

This Complaint is the last resort to stop a broadcaster that will not grant retransmission consent unless it receives payment of a per-subscriber retransmission consent fee for virtually every non cable, broadband-only subscriber. The fee is imposed not because there is any retransmission of a broadcast signal, but simply because the broadband-only subscriber is connected to a cable system. In contrast, if that same subscriber were connected to a broadband only system – one that did not also provide cable service – no broadcaster could impose any fee.[3]

Altafiber & FTTP Network In The Dayton DMA

altafiber, a subsidiary of Cincinnati Bell Telephone, is an independent telephone company serving greater Cincinnati, Ohio. altafiber says it initiated discussions with Cox in January 2019 about obtaining a retrains agreement for the CBS-affiliate, which would be included in altafiber’s cable television service lineup in the Dayton DMA. According to altafiber, the new FTTP network in Dayton “would provide meaningful competitive offerings to that of the dominant incumbent provider, Charter Communications as well as other MVPDs.”[4] altafiber explains that without the WHIO-TV CBS-affiliate in its channel lineup, its cable television service will be “uncompetitive and thus financially inviable.”[5] altafiber claims that if it fails to “obtain retransmission consent for WHIO on commercially reasonable terms, altafiber will not be able to launch cable television service on its FTTP system in Dayton, thus slowing down or halting construction of the system, including the deployment of ultra-high speed broadband services.”[6]

WHIO-TV, Apollo Global Management & Cox Media Group

Miami Valley Broadcasting Corporation, licensee of WHIO-TV, Dayton, Ohio, is ultimately controlled by Apollo Global Management, LLC and managed by Apollo-controlled Cox Media Group.

Altafiber: Cox’s Two Unreasonable Demands

At the heart of the complaint is altafiber claim that Cox has asserted two unreasonable demands which have not been forced on other MVPDs in the Dayton DMA. Specifically, altafiber claims Cox is withholding retransmission consent unless altafiber agrees to the two following demands:

1. Pay retransmission consent fees for non-video subscribers. A retransmission consent fee is paid for every “Subscriber.” From the beginning of negotiations, altafiber agreed that every cable television (i.e., video) subscriber would be a “Subscriber” and altafiber would pay the per subscriber retransmission consent fee for each one, which is common practice with retransmission consent agreements. Given that altafiber would actually retransmit WHIO’s signal to each cable television subscriber, payment of the per-subscriber fee is common industry practice. During negotiations, Cox expanded the definition of a “Subscriber” to include every non-cable, broadband-only subscriber who streams any video content available on the Internet. For example, a broadband-only subscriber’s action of merely accessing any streaming content, whether through free services (e.g., Peacock, Pluto TV or YouTube) or through private paid subscription (e.g., Netflix or Disney+), makes it a “Subscriber” for which altafiber must pay a retransmission consent fee to Cox despite the fact that there is no retransmission of WHIO’s signal by altafiber.8 The only nexus for imposing the per-subscriber retransmission consent fee, a nexus that is indefensible, is that the non-cable, broadband-only subscriber is connected to a cable system. No such fee would exist if that subscriber received broadband service from a pure play (e.g., non-cable system) broadband or telephone system.[7]

2. Impose Atypical and Confusing Subscriber Rate Structure. Cox insists on controlling how altafiber structures its subscriber rates, which in turn affects how rates are presented on customer bills and other public disclosures. The structure Cox demands would be foreign and confusing to consumers and, importantly, would frustrate apples-to-apples price comparisons with other MVPDs, including Charter, who is not subject to the same condition, thereby harming competition.[8]

altafiber claims these demands will negatively impact broadband subscribers in two ways: (1) materially increases the cost of providing broadband service; and (2) eliminates the ability to offer a competitively attractive bundle of cable television and broadband service.[9]

altafiber: There Is No Way To Determine Which Broadband-Only Subscribers Use An Unaffiliated Third Party Video Source Or OTT Service

So, would altafiber even be able to collect the proposed retrans payment from its broadband-only subscribers? Every video provider would probably respond with a resounding no. This is altafiber’s response to such a question:

In addition to the lack of any legitimate nexus, imposing the per-subscriber retransmission consent fee on non-cable, broadband-only subscribers based on their use of an unaffiliated third party source or OTT service would require a level of usage monitoring that altafiber does not undertake and, out of respect for the privacy of its subscribers, has no desire to undertake and realistically could not likely even implement.[10]

altafiber’s Requested Relief

In general, altafiber wants the Federal Communications Commission to prohibit Cox from imposing the two unreasonable demands listed above. This, altafiber believes, will allow the parties to resolve the remaining issues and reach a retransmission consent agreement.[11] altafiber’s full request relief is below:

altafiber respectfully requests that the Commission provide relief by ordering that:

a. Cox cannot require, directly or indirectly, payment of retransmission consent fees related to subscribers who do not purchase cable television service from altafiber;

b. Cox cannot mandate or restrict altafiber’s fee or billing structure or disclosures for cable service so long as altafiber does not disclose to subscribers the amount paid to Cox for retransmission consent;

c. Cox engage in good faith negotiations with altafiber to attempt to resolve remaining open issues; and

d. Cox is prohibited from engaging in any effort to circumvent the effect of the order, including, but not limited to, engaging in retaliatory pricing of its retransmission consent fees.

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[1] Cincinnati Bell Extended Territories LLC, dba altafiber v. Miami Valley Broadcasting Corporation (WHIO-TV), MB Docket No.__, File. No__, Verified Retransmission Consent Complaint For Enforcement Of Obligation To Negotiate In Good Faith (Complaint) (Apr. 4, 2022), https://www.fcc.gov/ecfs/search/search-filings/filing/10405090731473.

[2] Complaint, Summary at i.

[3] Id.

[4] Complaint at p. 2.

[5] Complaint, Summary at ii.

[6] Id.

[7] Complaint at p. 3.

[8] Complaint at p. 4.

[9] Id.

[10] Complaint, ¶37, at p. 17.

[11] Complaint at p. 6.