DISH Network L.L.C

Stephanie A. Roy 202 429 6278 [email protected] 1330 Connecticut Avenue, NW Washington, DC 20036-1795 202 429 3000 main www.steptoe.com REDACTED—FOR PUBLIC INSPECTION August 7, 2017 By ECFS Marlene H. Dortch Secretary Federal Communications Commission 445 12th Street S.W. Washington, DC 20554 Re: Tribune Media Company and Sinclair Broadcast Group, Inc., Consolidated Applications for Consent to Transfer Control, MB Docket No. 17-179 Dear Ms. Dortch: In accordance with the Protective Order in the above-captioned proceeding,1 DISH Network L.L.C. (“DISH”) submits the enclosed public, redacted version of its Petition to Dismiss or Deny, including supporting exhibits. DISH has denoted with {{BEGIN HCI END HCI}} where Highly Confidential Information has been redacted. The Highly Confidential Information in the Petition to Dismiss or Deny and supporting exhibits is the Highly Confidential Information of DISH. A Highly Confidential version of this filing is being simultaneously filed with the Commission and will be made available pursuant to the terms of the Protective Order. Please contact me with any questions. Respectfully submitted, ____________________________ Stephanie A. Roy Counsel for DISH Network L.L.C. Enclosure 1 Tribune Media Company (Transferor) and Sinclair Broadcast Group, Inc. (Transferee) Consolidated Applications for Consent to Transfer Control, MB Docket No. 17-179, Protective Order, DA 17-678 (July 14, 2017) (“Protective Order”). REDACTED – FOR PUBLIC INSPECTION BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 In the Matter of ) ) Tribune Media Company ) MB Docket No. 17-179 (Transferor) ) ) and ) ) Sinclair Broadcast Group, Inc. ) (Transferee) ) ) Consolidated Applications for Consent ) to Transfer Control ) PETITION TO DISMISS OR DENY OF DISH NETWORK L.L.C. Pantelis Michalopoulos Jeffrey H. Blum, Senior Vice President Jonathan B. Sallet & Deputy General Counsel Stephanie A. Roy Alison Minea, Director and Senior Counsel, Christopher Bjornson Regulatory Affairs Andrew M. Golodny Hadass Kogan, Corporate Counsel Georgios Leris DISH Network L.L.C. Steptoe & Johnson LLP 1110 Vermont Avenue, N.W., Suite 750 1330 Connecticut Ave, N.W. Washington, D.C. 20005 Washington, D.C. 20036 (202) 463-3703 (202) 429-3000 Counsel for DISH Network L.L.C. August 7, 2017 REDACTED – FOR PUBLIC INSPECTION Table of Contents Page No. I. Introduction and Summary ..................................................................................................2 II. Sinclair Has Not Met Its Burden of Proving the Transaction is in the Public Interest..................................................................................................................................9 A. Standard of Review ..................................................................................................9 B. Sinclair Has Failed to Provide Key Information Necessary for a Full Evaluation of the Transaction ................................................................................12 III. The Transaction Will Lead to Higher Retransmission Fees and Higher Prices for Consumers..........................................................................................................................14 A. The Proposed Transaction Should Be Evaluated Both at the Local and National Level ........................................................................................................15 1. The Transaction Would Have Both Local and National Effects ...............15 2. The Commission and the Department of Justice Have Repeatedly Recognized the National Effects of Similar Transactions .........................17 B. The Transaction Will Lead to Higher Prices for DISH and Consumers................21 1. Larger Broadcast Groups Command Higher Rates ...................................21 2. The Blackout of Two Stations in a DMA Leads to Greater Subscriber Losses than the Blackout of One .............................................31 C. Prices for Tribune Stations Would Likely Increase Automatically Upon Consummation of the Transaction .........................................................................34 D. The Consolidation of the Broadcast Industry Has Been an Important Factor Leading to Retransmission Price Increases ................................................35 IV. New Sinclair Would Have Both the Incentive and Ability to Harm OVDs and Traditional MVPDs ............................................................................................................43 V. The Proposed Transaction Would Undermine Localism ...................................................45 A. Only a Transaction that Advances Localism Can Serve the Public Interest ..........45 B. The Acquisition of Tribune Would Set Localism Back.........................................47 VI. The Applicants’ “Benefits” Actually Suggest Detriments to the Public Interest ..............56 A. The Transaction Would Undermine, Rather than Improve, the Quality of News and Local Programming in the Tribune Markets .........................................58 B. New Sinclair Would Scale Back on the Growth of Local News at Tribune Stations, Harming, Not Helping, Tribune Viewers................................................59 C. Sinclair Has Drastically Cut, Not Increased, Headcount .......................................62 i REDACTED – FOR PUBLIC INSPECTION D. Sinclair’s Commitments to Digital Content and Awards Are Not Merger- Specific Benefits ....................................................................................................62 E. Sinclair’s History in News and Local Programming Demonstrates that the Public Interest is Harmed by Its Corporate Strategies ...........................................63 VII. Sinclair’s Conduct Counsels Against Entrusting It with More Stations ............................65 A. Sinclair Has Shown Disregard for the Commission’s Rules .................................65 1. Sinclair and “Good Faith” ..........................................................................65 2. Sinclair and the Limits on Broadcast Ownership ......................................68 3. Sinclair and Sponsor Disclosure ................................................................69 B. Sinclair Routinely Uses Consumers as Leverage ..................................................71 VIII. The Application Is Premature ............................................................................................72 IX. Conclusion .........................................................................................................................76 Exhibit A: List of Combined Sinclair/Tribune Stations and Affiliations Exhibit B: Information that DISH and Others Recommend the Commission Request Exhibit C: Declaration of Melisa Ordonez Exhibit D: Declaration of Janusz A. Ordover Exhibit E: Declaration of William P. Zarakas and Jeremy A. Verlinda ii REDACTED – FOR PUBLIC INSPECTION BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 In the Matter of ) ) Tribune Media Company ) MB Docket No. 17-179 (Transferor) ) ) and ) ) Sinclair Broadcast Group, Inc. ) (Transferee) ) ) Consolidated Applications for Consent ) to Transfer Control ) PETITION TO DISMISS OR DENY OF DISH NETWORK L.L.C. DISH Network L.L.C. (“DISH”)1 respectfully petitions the Commission to dismiss or deny the proposed acquisition of Tribune Media Company (“Tribune”) by Sinclair Broadcast Group, Inc. (“Sinclair”) (collectively, the “Applicants”).2 The Application3 seeks approval for station combinations that violate the current media ownership rules, and the Applicants fail to submit a single economic study or expert declaration supporting any of the claimed “benefits.” The Applicants fail to demonstrate that the merger would serve the public interest. Nor are there 1 DISH is a multichannel video programming distributor (“MVPD”) that retransmits local broadcast stations in every one of the 210 designated market areas in the United States. DISH today has retransmission consent agreements with both Applicants, allowing it to retransmit certain local broadcast stations owned by the Applicants. DISH expects to negotiate with both Applicants in the future for continued retransmission of their stations. In addition, DISH’s Sling TV, an Online Video Distributor (“OVD”), has started offering local broadcast stations in a number of markets {{BEGIN HCI END HCI}}. For these and other reasons described herein, DISH is a party in interest under Section 309(d)(1) of the Communications Act. See 47 U.S.C. § 309(d)(l). 2 See Public Notice, MB Docket No. 17-179, Applications to Transfer Control of Tribune Media Company to Sinclair Broadcast Group, Inc., DA 17-647 (July 6, 2017). 3 See Application of Tribune Media Company and Sinclair Broadcast Group, Inc., MB Docket No. 17-179 (June 28, 2017) (“Application”). REDACTED – FOR PUBLIC INSPECTION countervailing benefits, conditions, or divestitures that would alleviate the substantial harms posed by the merger. The proposed transaction is the largest in a Sinclair acquisition spree that has engulfed Fisher, Allbritton, and Bonten over the last four years. It would turn Sinclair into the nation’s largest broadcast conglomerate and lead to higher prices, more station blackouts, less choice, and less local news for millions of consumers. The resulting company (“New Sinclair”) would: own over 500 television stations (accounting for individual multicast feeds), including 117 stations affiliated with a “Big-4” network; reach 72% of American households;

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