• Abstract and Figures
• Public Full-text

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 29, 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 Reply, including supporting exhibits. DISH has denoted with {{BEGIN HCI END HCI}} where its proprietary Highly Confidential Information has been redacted. This Highly Confidential Information in the Reply and supporting exhibits is the Highly Confidential Information of DISH. DISH has denoted with {{BEGIN SINCLAIR HCI END SINCLAIR HCI}} where it has redacted Highly Confidential Information taken from or derived from the Highly Confidential Information in the Applicants’ filings. 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 ) REPLY 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 29, 2017 REDACTED – FOR PUBLIC INSPECTION Table of Contents Page I. INTRODUCTION AND SUMMARY ................................................................................1 II. OPPOSITION TO THIS TRANSACTION TRANSCENDS IDEOLOGY AND PRIVATE INTEREST .......................................................................................................10 III. THE OPPOSITION APPEARS TO REVEAL NO SERIOUS EFFORT AND LACKS CRITICAL REBUTTAL EVIDENCE ................................................................13 IV. THE APPLICANTS IMPROPERLY TRY TO SHIFT THEIR BURDEN ONTO PETITIONERS ..................................................................................................................17 V. THE TRANSACTION WOULD RESULT IN HIGHER PRICES ...................................19 A. New Sinclair’s Enlarged Size Would Likely Result in Higher Prices ...................19 B. New Sinclair’s Control of Two Stations in a Larger Number of Markets Would Lead to Even Greater Leverage .................................................................36 VI. THE APPLICANTS CONTINUE TO FAIL TO SHOW COGNIZABLE BENEFITS, AND THE OPPOSITION HIGHLIGHTS THE RISKS TO LOCALISM THROUGH NON-DENIAL AND ADMISSION ........................................41 A. Unproven Scale Efficiencies Cannot Save an Otherwise Anticompetitive Merger ....................................................................................................................41 B. The Transaction Also Poses Vertical Risks to Competition ..................................44 C. The Opposition Ironically Confirms the Risks to Localism ..................................46 1. Lack of Context Continues to Undermine Benefit Claims ........................46 2. The Applicants’ Rhetoric Cannot Disguise Their Admissions ..................51 3. Sinclair Does Not, and Cannot, Make a Case for Better Overall Quality........................................................................................................54 4. Sinclair Cannot Claim Accelerated ATSC 3.0 Rollout as a Transaction Specific Benefit ......................................................................57 VII. THE OPPOSITION DOES NOTHING TO ASSUAGE CONCERNS OVER SINCLAIR’S CONDUCT .................................................................................................58 VIII. THE APPLICANTS CONCEDE THAT THEIR DISREGARD FOR EXISTING MEDIA OWNERSHIP RULES IS UNPRECEDENTED .................................................60 IX. FUNDAMENTAL EVIDENCE IS STILL MISSING AND SHOULD BE REQUESTED OF THE APPLICANTS ............................................................................63 X. CONCLUSION ..................................................................................................................64 i REDACTED – FOR PUBLIC INSPECTION Exhibit A: Sinclair Admissions and Unrebutted Arguments Exhibit B: Reply Declaration of Melisa Ordonez Exhibit C: Reply Declaration of Janusz A. Ordover Exhibit D: Reply 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 ) REPLY OF DISH NETWORK L.L.C. DISH Network L.L.C. (“DISH”) respectfully replies to the Consolidated Opposition to Petitions to Deny (“Opposition”)1 submitted by Tribune Media Company (“Tribune”) and Sinclair Broadcast Group, Inc. (“Sinclair”) (collectively, the “Applicants”) in the above- referenced proceeding.2 I. INTRODUCTION AND SUMMARY The Applicants’ Opposition does not come close to meeting their heavy burden of proof, and indeed it does not even try. Among other things, the Applicants have chosen to leave critical arguments unrebutted, including evidence that the merger poses grave public interest harms. The transaction will likely raise prices for distributors and consumers: Sinclair already plans on it, and the Opposition reveals that the transaction’s largest benefit in the Applicants’ eyes is that it will give the resulting company (“New Sinclair”) the size necessary to take on distributors—i.e., 1 Tribune Media Company and Sinclair Broadcast Group, Inc., Consolidated Opposition to Petitions to Deny, MB Docket No. 17-179 (Aug. 22, 2017). 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). REDACTED – FOR PUBLIC INSPECTION increase its prices. And New Sinclair will likely charge more for less. Among DISH viewers, and adjusted for retransmission prices, {{BEGIN HCI END HCI}} Under Sinclair’s management, New Sinclair will likely drag the Tribune stations down to Sinclair’s level. The Opposition fails to prove that this transaction will result in any merger-specific benefits to the public. Indeed, the Applicants set the bar improperly low for themselves by suggesting that Sinclair’s performance of its fundamental duties as a broadcaster will be a “benefit” that will accrue to New Sinclair as a result of the company’s ownership of Tribune. These claims in fact showcase Sinclair’s current lack of commitment to its duties. Diversity of Opposition. Unusually for such a transaction, the Applicants have not been able to enlist even one party to file formal comments in support of their proposed merger. By contrast, many have opposed it. The 21 parties filing 13 Petitions to Deny, letters, and opposing Comments come from an uncommonly broad spectrum of interests, views, and ideologies.3 But 3 Petition to Dismiss or Deny of DISH Network, L.L.C. (“DISH”), MB Docket No. 17-179 (Aug. 7, 2017) (“DISH Petition to Deny” or “Petition”); Petition to Deny of the American Cable Association (“ACA”), MB Docket No. 17-179 (Aug. 7, 2017) (“ACA Petition”); Petition to Deny of NTCA-The Rural Broadband Association (“NTCA”), MB Docket No. 17-179 (Aug. 7, 2017) (“NTCA Petition”); Petition to Deny of the Competitive Carriers Association (“CCA”), MB Docket No. 17-179 (Aug. 7, 2017) (“CCA Petition”); Comments of T-Mobile USA, Inc., MB Docket No. 17-179 (Aug. 7, 2017); Comments of the American Television Alliance (“ATVA”), MB Docket No. 17-179 (Aug. 7, 2017) (“ATVA Comments”); Petition to Deny of Free Press, MB Docket No. 17-179 (Aug. 7, 2017) (“Free Press Petition”); Petition to Deny of Public Knowledge, Common Cause, and the United Church of Christ, OC Inc. (“Public Knowledge”), MB Docket No. 17-179 (Aug. 7, 2017) (“Public Knowledge Petition”); Comments of Cinémoi, RIDE Television Network, Awe – A Wealth Of Entertainment, MAVTV Motor Sports Network, One America News Network, TheBlaze and Eleven Sports Network (“Independent Programmers”), MB Docket No. 17-179 (Aug. 7, 2017) (“Independent Programmer Comments”); Petition to Dismiss or Deny of Newsmax Media, Inc. (“Newsmax”), MB Docket No. 17-179 (Aug. 7, 2017) (“Newsmax Petition”); Petition to Deny of Steinman Communications, Inc. (“Steinman”), MB Docket No. 17-179 (Aug. 7, 2017) (“Steinman

Load more

  136

Copy Link