The American Cable Association told the FCC last week that if the agency decides to approve Nexstar's acquisition of Media General, it should not let Nexstar use "after-acquired" clauses to raise the retrans fees of the Media General stations it is acquiring.
Nexstar has been telling MVPDs it expects to get a waiver from the FCC so that the commission could act on the merger, perhaps as early as this week, according to a source speaking on background.
The deal proposal was not filed until after the deadline for FCC action on stations in the broadcast incentive auction. The commission had said it would not approve any deals for the duration of the auction if they involved stations potentially in the auction, which the Nexstar-Media General deal does.
Nexstar and Media General sought a waiver of that prohibition.
If that is the case, the ACA told a top advisor to FCC chairman Tom Wheeler last week, and the deal is approved, the FCC must limit the triggering of the clauses, which it said would force "dozens of MVPDs" and millions of their subs to pay dramatically higher fees, to the tune of $24 million in the first year alone.
The clauses allow Nexstar to apply its retrans agreement to stations it acquires in markets where it already has a retrans deal with that MVPD.
ACA called the widespread application of those clauses in the deal a merger-specific harm that needs corrective conditions.
"This merger presents an opportunity for the commission to protect consumers from paying higher cable rates as a direct consequence of the merger’s triggering of numerous after-acquired station clauses. To ameliorate the direct harm resulting from this transaction, the Commission should condition approval of any license transfers on Nexstar’s commitment not to exercise its right to trigger harmful after-acquired station clauses for the duration of its agreement with an MVPD."
