September 07, 2012 5:40pm PT by Eriq Gardner
Judge Won't Stop Time Warner Cable from Retransmitting 'Distant' CBS, NBC Signals
Time Warner Cable can breathe much easier after a Texas judge declared that the cable giant is unlikely to lose a lawsuit that contends it stole NBC and CBS signals.
The dispute concerns a quirky part of the TV business known as retransmission consent. Typically, pay-TV distributors will negotiate carriage deals with local broadcasters.
Earlier this year, TWC was in danger of losing NBC and CBS signals in markets including Cincinnati, Louisville, Orlando, Winston-Salem and Burlington-Plattsburgh thanks to carriage disputes with Hearst Television and Bright House Networks.
So TWC took NBC/CBS signals in other markets as "replacement stations."
Nexstar Broadcasting, the owner of these appropriated stations, objected in a lawsuit in July, arguing that although it had a deal with TWC, the cable company was going too far by taking its signals beyond local territories. The lawsuit claimed breach of contract and copyright infringement. Nexstar, one of the nation's largest operators of network affiliate stations, also pointed out that a viewer in Louisville might not want to learn about the weather in Rochester on the "local" news.
TWC argued in response that the retransmission of Nexstar’s signals was fully authorized by agreements, leading to a judge's decision on Wednesday.
Nexstar had demanded a temporary restraining order and preliminary injunction that would bar TWC from its practice of distant retransmission.
In considering whether to grant the motion, Texas judge Jorge Solis was tasked with determining the plaintiff's likelihood of success, which meant taking a closer look at TWC's Retransmission Consent Agreement ("RCA") with Nexstar.
Nexstar pointed out the the RCA referred to specific stations and each station's local market.
But that's not enough for the judge.
"Nowhere in the RCA does Nexstar limit its retransmission consent," says the judge's order. "While the geographically limiting language, 'located in the Television Market of a Station,' is present in the RCA, it is not contained in the section addressing retransmission consent; rather, it appears when discussing Time Warner's carriage obligations..."
The judge goes onto say that the parties are smart enough to have made geographical limitations if so desired, and thus has to treat the omission as being "purposeful."
"Therefore, the RCA does not limit Time Warner's ability to retransmit the signals to any particular region," the judge says in turning down Nexstar's TRO request.
The ruling could be upsetting to networks like NBC, which according to the original complaint sent its own demand to TWC to cease its distant retransmission practice. At very least, the judge's decision seems like it will be a major caution flag as networks and pay-TV distributors negotiate new transmission deals in the future.
The full ruling is on the next page.
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