FCC Chairwoman Mignon Clyburn

FCC Chairwoman Mignon Clyburn (Bloomberg / June 26, 2013)

The Federal Communications Commission has proposed a $2.25-million fine for a small Houston cable TV operator that transmitted broadcast signals without permission.

The company, TV Max Inc., provides cable TV services to multiple dwelling units in Houston. Such companies are known in the industry as Single Master Antenna Television operators. As part of its service it was carrying local broadcast stations, including outlets owned by ABC, Fox and Univision.

Typically, SMATV operators provide pay TV to hotels or apartment complexes and usually have a headend at the facility to distribute the signal. Under FCC rules, that exempts them from paying broadcasters so-called retransmission consent fees.

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But TV Max didn't have a headend where it was providing service and hadn't negotiated deals with the TV stations. The FCC had previously warned TV Max that it was in violation of its retransmission consent rules, which is why the proposed fine is so high.

FCC Chairwoman Mignon Clyburn has signed off on the proposed fine.

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