Hunt-Valley-based Sinclair Broadcast Group Inc. rejected yesterday binding arbitration to resolve an impasse with a cable provider over how much airing its stations is worth, the latest sign that thousands of customers in the Midwest and South will remain without major network affiliates this weekend.
Sinclair's decision came a day after Iowa's congressional delegation urged the company and Mediacom Communications Corp. to enter arbitration to resolve their financial dispute. More than 250,000 of the viewers who have had programming blocked on their cable systems live in Des Moines, Iowa, and Cedar Rapids, Iowa.
Sinclair blocked 22 stations from airing on cable systems in 13 states last weekend after negotiations failed with Mediacom on a price to carry the local network affiliates, such as Fox, ABC and CBS. The dispute, which has left some of the 700,000 cable subscribers without NFL playoff games and programs such as Desperate Housewives, is the latest salvo in an industrywide battle over retransmission fees.
"I hope you can understand Sinclair's reluctance to agree to such an unusual approach to resolve what is essentially a disagreement on price in a commercial negotiation," Sinclair President and Chief Executive Officer David D. Smith wrote to Iowa's congressional delegation.
Mediacom says Sinclair's demands are too high, while Sinclair argues that it is asking for less than what cable companies pay networks, such as Disney. A letter to the chief executives of Sinclair and Mediacom dated Wednesday and signed by seven members of the Iowa delegation said customers were being "harmed by this unfortunate situation" and "left with little recourse to the disruption of service."
The delegation urged both sides to follow a suggestion by the Federal Communications Commission's media bureau to enter binding arbitration - an option that Mediacom supports.
"We were hoping that it was a workable solution," said Thomas J. Larsen, Mediacom's vice president of legal affairs. "It seems apparent to everybody except them that it's a workable solution."
The FCC panel rejected last week Mediacom's complaint that Sinclair did not negotiate in good faith. Mediacom filed an appeal Monday.
Smith said the company's decision to reject arbitration was influenced in part by Mediacom customers' ability to access their programming using alternative means, such as switching to satellite television or using an antenna for free, over-the-airwaves transmission.
Rep. Tom Latham, a Republican representing Iowa's 4th Congressional District, said legislation may be necessary to force companies like Sinclair and Mediacom to settle similar disputes.
"In the meantime, there are playoff games, lots of things going on where people are very upset about it," Latham said. "I don't think they're doing anybody any good. They should grow up and sit down and negotiate."
Beginning Saturday, Mediacom customers were denied access to Sinclair-owned stations in several markets, including Des Moines, Ames and Cedar Rapids, Iowa; Lexington, Ky.; Milwaukee and Madison,Wis.; Nashville, Tenn.; Peoria, Champaign and Springfield, Ill.; St. Louis; and Minneapolis.
Since then, Mediacom has handed out thousands of free antenna kits in Des Moines and Cedar Rapids.
In the meantime, Sinclair is approaching a deadline of midnight tonight to negotiate retransmission fees with Time Warner Cable. Their negotiations, however, have been relatively quiet and without the barbs traded between Sinclair and Mediacom. Affected markets include Buffalo and Syracuse, N.Y., and parts of Ohio, Kentucky and West Virginia.
A Time Warner spokeswoman said the company is confident that it will reach an agreement with Sinclair by the deadline.
Sinclair also is negotiating with Comcast Corp., which could affect Baltimore viewers in March by limiting access to the Fox and local networks.