Before the Federal Communications Commission Washington, D.C. 20554

In the Matter of ) ) Licensee, LLC ) MB Docket No. 20-441 And Gray Media Group, Inc. ) Complainants, ) CSR-8996-C ) v. ) ) Citizens Telecom Services Company, ) LLC d/b/a Frontier Communications ) Defendant.

To: Office of the Secretary Attn: Chief, Media Bureau

ANSWER TO GOOD FAITH COMPLAINT

Scott Friedman Bruce Beard Kelsey Rejko Cinnamon Mueller 1714 Deer Tracks Trail Suite 230 St. Louis, MO 63131 (314) 462-9000

Attorneys for Citizens Telecom Services Company, LLC d/b/a Frontier Communications

January 11, 2021 TABLE OF CONTENTS

I. INTRODUCTION AND SUMMARY ...... 2

II. BACKGROUND ...... 4

III. FRONTIER NEGOTIATED IN GOOD FAITH – THE FACT THAT THE PARTIES DID NOT REACH AN AGREEMENT DOES NOT EQUATE TO BAD FAITH ...... 9

A. Gray’s Complaint fails to demonstrate that Frontier violated the Commission’s per se objective standards for good faith retransmission consent negotiations. ... 10

B. Gray’s Complaint fails to establish that Frontier violated the Commission’s regulations under the totality of the circumstances test...... 14

IV. DESPITE GRAY’S ATTEMPTS TO OBTAIN COMMISSION FORFEITURES, FRONTIER DID NOT VIOLATE THE COMMISSION’S NOTICE RULES ...... 15

V. CONCLUSION ...... 18

1 I. INTRODUCTION AND SUMMARY

Pursuant to 47 C.F.R. §§ 1.2 and 76.7(b) of the Commission’s rules, Citizens Telecom

Services Company, LLC d/b/a Frontier Communications (“Frontier”) responds to the allegations made in the Good Faith Complaint (“Complaint”) filed December 22, 2020 by Gray Television

Licensee, LLC and Gray Media Group, Inc. (collectively, “Gray”). In its Complaint, Gray alleges that Frontier violated its duty to negotiate in good faith and its obligation to notify its customers “as soon as possible” once Frontier knew it would no longer have Gray’s consent to retransmit the stations.1 Frontier denies these and all related allegations as lacking any basis in fact or law.

The simple fact is that Frontier and Gray disagree over the value of Gray’s stations.

After 25 days of negotiation and three offers put forth by Frontier, any of which Gray could have accepted, Gray now cries foul because Frontier did not agree with the financial terms that Gray wanted to force on Frontier and its customers. Essentially, Gray refuses to acknowledge that

Frontier decided not to accept Gray’s proposed financial terms. Instead, Gray makes unsupportable claims that Frontier’s lead negotiator “had no authority to enter into an agreement,” and that Frontier “engaged in Potemkin negotiations” and “fake offers” because

Frontier “decided more than a month ago” that it would not extend its retransmission consent agreement with Gray.2 The main premise of Gray’s specious argument is based on the

inaccurate assumption that Frontier removed Gray’s stations from its online channel guides

several weeks before the agreement was due to expire and possibly prior to beginning

1 Gray Television Licensee, LLC and Gray Media Group, Good Faith Complaint, MB Docket No. 12-1 (filed Dec. 22, 2020) (“Gray Complaint”). 2 Gray Complaint at 4.

2 negotiations.3 To the contrary, Frontier did not update its customer-facing channel guides until

shortly after the agreement had expired.4

As the Commission has stated, “disagreement over the rates, terms and conditions of

retransmission consent – even fundamental disagreement – is not indicative of a lack of good

faith.”5 Frontier and Gray traded emails, phone calls and multiple proposals over 25 days, and

continued speaking up until the final minutes before the agreement was scheduled to expire. The

fact that Gray refused to accept the offers put forth by Frontier does not make them “fake offers,”

but merely “unacceptable offers.” Nonetheless, that is precisely what Gray asks the Commission

to do here in claiming that the multiple offers set forth by Frontier and rejected by Gray were

“fake offers.” Had Gray accepted any of Frontier’s offers at the time they were made, Gray

would have discovered that the offers were not “fake” and carriage would have continued.

Seemingly, Gray only claims Frontier’s offers became “fake” when Frontier rejected Gray’s final offer. This retransmission consent negotiation was no different than the hundreds of other negotiations across the industry. Gray’s complaint is simply an attempt by a broadcaster to add additional leverage to the retransmission consent process – either accept our last offer or we will claim that all your offers we rejected were fake and you never meant to reach agreement. Ultimately, the parties could not reach an agreement on the value of the stations but that does not render the negotiations a façade on Frontier’s end. The Commission should deny the Complaint.

3 Gray Complaint at 8. 4 Exhibit 1, Declaration of David Zanvettor, Director, Digital Experience, Citizens Telecom Services Company. 5 Mediacom Communications Corporation v. Sinclair Broadcast Group, Inc., Memorandum Opinion and Order, 22 FCC Rcd. 35, ¶ 6 (2007) (“Mediacom/Sinclair Order”).

3 Gray tries to gain additional leverage in the negotiations by attempting to secure

Commission forfeitures against Frontier by asserting that Frontier’s conduct violated the

Commission’s consumer notice rules.6 Not only are these allegations irrelevant to whether

Frontier negotiated with Gray in good faith, but Frontier provided notice to their customers in

strict compliance with the Commission’s rules,7 as amended by the Commission’s 2020 Service

Change Notification Order.8

II. BACKGROUND

Frontier provides communications services to urban, suburban, and rural communities in

25 states. Frontier offers a variety of services to residential customers over its fiber-optic and

copper networks, including traditional telephone, video, high-speed Internet, advanced voice,

and Frontier Secure® digital protection solutions.

In 2016, Frontier acquired Verizon’s wireline assets in California, , and Texas

(including the Tampa, Florida system) and introduced its new Vantage™ video service in several

new markets, including Myrtle Beach/Charleston, South Carolina.9 In these markets, Frontier is

a competitive entrant, competing for market share against the incumbent cable companies and

established satellite service providers. In April of 2020, Frontier filed for Chapter 11

6 47 C.F.R. § 76.1603. 7 Id. at § 76.1603(b) (when “the change results from circumstances outside of the cable operator’s control (including failed retransmission consent . . . negotiations during the last 30 days of a contract) . . . notice shall be provided as soon as possible”). 8 Cable Service Change Notifications, Report and Order, 35 FCC Rcd. 11052 (2020) (“2020 Service Change Notification Order”).

9 See Sean Buckley, Frontier Acquires Verizon Wireline Assets in 3 States for $10.5B, FIERCE TELECOM, available at https://www.fiercetelecom.com/telecom/frontier-acquires-verizon-wireline-assets-3-states-for-10-5b (last viewed Jan. 11, 2021).

4 bankruptcy.10 Throughout the bankruptcy, Frontier has continued providing service to its customers without interruption. In May 2020, Frontier completed a sale with Ziply Fiber, selling its cable systems in Washington and Oregon.11 Today, Frontier owns and operates cable television systems in 10 states and, in total, provides video service to about 490,000 video subscribers.

Frontier and Gray were parties to a retransmission consent agreement, dated October 12,

2016 and subsequently amended on June 30, 2018. Both the underlying agreement and

amendment were negotiated with Raycom, which was subsequently purchased by Gray in

2019.12 The agreement, as amended, covers Frontier’s retransmission of WWSB (Sarasota,

Florida ABC affiliate) on Frontier’s cable system serving the Tampa and Sarasota, Florida areas,

and WMBF (Myrtle Beach, South Carolina NBC affiliate) and WCSC (Charleston, South

Carolina CBS affiliate) on Frontier’s cable system serving the Myrtle Beach/Charleston, South

Carolina area. Due to the small number of subscribers receiving WMBF and WCSC

programming on Frontier’s Myrtle Beach system (about 300), Frontier’s economic focus during

negotiations was the duplicative carriage of WWSB on its Tampa system (about 150,000

subscribers), where Frontier also retransmits WFTS, the ABC affiliate in Tampa, Florida owned

by Scripps. This unique situation stems from the Tampa, Florida designated market area

(“DMA”) having two ABC-affiliated stations – WWSB and WFTS. Importantly, Frontier is

permitted to air all programming (including national ABC programming) on WFTS in Sarasota

10 See Edward Gately, Frontier Communications Files Chapter 11 Bankruptcy, CHANNEL PARTNERS, available at https://www.channelpartnersonline.com/2020/04/15/frontier-communications-files-chapter-11-bankruptcy/ (last viewed Jan. 11, 2021). 11 See Seattle Times staff, Frontier to finalize $1.35 billion sale of Northwest assets to Kirkland-based Ziply Fiber, SEATTLE TIMES, available at https://www.seattletimes.com/business/frontier-to-finalize-1-35-billion-sale-of- northwest-assets-to-kirkland-based-ziply-fiber/ (last viewed Jan. 11, 2021).

12 See John Lafayette, Gray Completes Acquisition of , BROADCASTING+CABLE, available at https://www.nexttv.com/news/gray-completes-acquisition-of-raycom-media (last viewed Jan. 11, 2021).

5 County, despite WWSB’s presence, because the Commission has found WFTS to be significantly viewed there.13 Thus, many Frontier customers in the Tampa DMA were receiving and paying for “must-have” ABC-affiliated programming on two separate, distinct channels.14

As Gray specifically acknowledges in its Complaint, Frontier, not Gray, reached out to begin negotiations on November 23, 2020, 25 days before the agreement was scheduled to expire.15 Concerned that there had been no contact from Gray despite the approaching expiration, Frontier’s Assistant Vice President, Contracts and Partnerships (“lead negotiator”),16 emailed Gray and asked “when [can we] expect an Agreement for your Stations as the current

Agreement expires on December 18th.”17 The parties then exchanged emails over the next two days and spoke via telephone on November 25, 2020.18 In this communication, Frontier’s lead

13 FCC Significantly Viewed List, page 61, Modified March 8, 2019, available at https://www.fcc.gov/files/significantviewedstations030819pdf (last viewed Jan 11, 2021). Due to network non- duplication and syndicated exclusivity, Frontier only airs WWSB’s local, non-network or syndicated programming to about 100,000 of its 150,000 Tampa system subscribers. About 50,000 Frontier subscribers (in the Sarasota area) receive the national ABC network and syndicated programming airing on WWSB. 14 The term “must have” was coined by the Commission in 2002, when the Commission found that an MVPD’s ability to compete is significantly harmed if it is denied access to “must have” programming for which there is no good substitutes. Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Report and Order, 17 FCC Rcd. 12124, ¶ 4 (2002). In its order approving News Corp.’s purchase of DirecTV, the Commission found that local broadcast stations are a form of “must have” (i.e., a source of market power) programming that is competitively necessary for MVPDs to have in their channel line-ups because the programming is uniquely valuable and lacking close substitutes. General Motors Corporation and Hughes Electronics Corporation, Transferors, and The News Corporation Limited, Transferee, Memorandum Opinion and Order, 19 FCC Rcd. 473, ¶ 201 (2004) (“News Corp. currently possesses significant market power in the DMAs in which it has the ability to negotiate retransmission consent on behalf of local broadcast television stations.”). 15 Gray Complaint at 3. 16 See Exhibit 2, Declaration of Tina Power, Senior Vice President, Technology, Finance and PMO, Citizens Telecom Services Company. As Ms. Power explains, Frontier’s lead negotiator has full authority to negotiate retransmission consent agreements on behalf of the company. 17 Exhibit 3, Email 1, dated Nov. 23, 2020 from Ms. Francie Leader to Ms. Claire Ferguson. 18 Gray claims that it expected Frontier to participate in the agreement that Gray was negotiating at that time with the National Cable Television Cooperative (“NCTC”) pursuant to the provisions of the Television Viewer Protection Act of 2019, Pub. L. No. 116-94, 133 Stat. 2534, 3198 (2019) (“TVPA”). Under the TVPA and the Commission’s implementing rules, large broadcast station groups are obligated to negotiate in good faith with qualified multichannel video programming distributor (“MVPD”) buying groups. These qualified buying groups may negotiate on behalf of two or more MVPDs, none of which serve more than 500,000 subscribers nationally, and that collectively serve no more than 25% of all households receiving service from any MVPD in a given local market.

6 negotiator informed Gray that Frontier was not interested in extending the agreement, but rather

preferred to reach a resolution by December 18th since Frontier had contracts covering nearly

100 other unique programming services scheduled to expire at the end of 2020.

After reviewing Gray’s initial proposal, an entirely new agreement rather than an

amendment to the existing agreement, Frontier’s lead negotiator forwarded the proposed

agreement to its retransmission consent counsel (who assists with the vast majority of Frontier

programming negotiations) on the same day, explaining that an agreement would need to be

reached by December 18th. Frontier subsequently responded with a markup of the proposed

agreement and a rate counter-offer on November 30, 2020, which Gray rejected. On December

1, 2020, Gray responded, and Frontier’s lead negotiator again forwarded Gray’s most recent

redlined agreement to counsel for review with a note emphasizing the need for a quick

turnaround. Over the next week, Gray and Frontier traded further emails, proposals and spoke via telephone, leading to progress on the non-economic terms and conditions of the agreement.

Frontier’s lead negotiator even expressed to Gray that “[w]e would appreciate connecting with

you tomorrow at 5PM ET if that works. Would love to keep the momentum going!!”19 On

December 7, 2020, Frontier’s lead negotiator communicated to Gray that “[w]e are getting closer

. . . please see our redline with just a few items left in the document to finalize. Of course that

leaves the rates . . . we are standing by to talk once you’ve had a chance to review.”20 On

December 14, 2020, Frontier’s lead negotiator once again reached out to counsel with the new

rate structure and counter that Gray proposed, and requested a quick turnaround.

47 C.F.R. § 76.65(b)(2)(iii)(A)(1). At the end of October, Frontier had over 500,000 subscribers nationally, and Frontier therefore believed it was not eligible to participate in any NCTC negotiation. 19 Exhibit 3, Email 2, dated Dec. 1, 2020 from Ms. Francie Leader to Ms. Claire Ferguson. 20 Id., Email 3, dated Dec. 7, 2020 from Ms. Francie Leader to Ms. Claire Ferguson (emphasis added).

7 Between December 7, 2020 and December 18, 2020, Frontier and Gray negotiated via

email and telephone, and traded proposals on multiple occasions, including on December 9th,

December 10th, December 15th, December 16th, December 17th and December 18th. During these

conversations, Frontier’s lead negotiator noted the unique situation of having multiple ABC

affiliates in one market, and that being in bankruptcy resulted in the need to minimize costs,

especially where Frontier, and as a direct result, their customers, were paying twice for

duplicative national ABC network content in the same market. Additionally, during the

negotiation period, Frontier conducted research on the availability of local programming on

WWSB’s website and discovered that WWSB’s locally produced content, including newscasts,

were broadcast live on WWSB’s website and mobile application free of charge. Frontier also

learned that replays of WWSB’s locally produced content, including newscasts, were also

available for viewing free of charge. These discoveries seriously diminished the value of

carrying WWSB to Frontier executives, especially in light of the duplicative ABC network

national programming available to customers via WFTS. Nonetheless, Frontier’s lead negotiator

spoke to Gray multiple times on December 18, 2020 before the agreement was due to expire.

Unfortunately, the parties could not reach an agreement on the terms for continued carriage, and

Frontier’s lead negotiator had no choice but to inform Gray that “financially it doesn’t work for

[Frontier] to have two ABC’s on in one market for all the reasons that we have previously

discussed.”21

These final emails and telephone conversations occurred within the last hour before the

agreement was scheduled to expire. As soon as it became apparent that Frontier would need to

remove the stations, Frontier notified customers via a channel slate, set-top box message, email,

21 Id., Email 4, dated Dec. 18, 2020 from Ms. Francie Leader to Ms. Claire Ferguson.

8 social media, and through updated channel guides on Frontier’s website.22 In particular, Frontier

informed its Florida customers that content from WWSB was still available via alternative means

– the national ABC network programming on WFTS, and locally produced content, including

newscasts, on WWSB’s website and mobile application.23 Frontier could not place a warning or other notification on WWSB’s channel prior to the agreement’s expiration due to prohibitions in the existing contract, and therefore placed a slate on WWSB’s channel as soon as it could legally do so. Frontier further minimized customer disruption by promptly securing WFTS’s permission to simulcast the station on WWSB’s former channel, ensuring that customers could receive the same national ABC network programming without changing channels.

III. FRONTIER NEGOTIATED IN GOOD FAITH – THE FACT THAT THE PARTIES DID NOT REACH AN AGREEMENT DOES NOT EQUATE TO BAD FAITH

Gray asserts that Frontier’s conduct violated the Commission’s good faith rules in two respects. First, Gray alleges that Frontier’s conduct constitutes a per se violation for refusing to

negotiate retransmission consent and refusing to designate a representative with authority to make binding representations on retransmission consent.24 Second, Gray claims that Frontier

breached its duty to negotiate in good faith based on the totality of the circumstances of

Frontier’s conduct in this retransmission consent negotiation.25 As set forth below, ample

evidence and Commission precedent demonstrates that Frontier engaged in good faith

negotiations with Gray.

22 See Exhibit 4, which contains the notifications that Frontier sent to its customers. 23 See Exhibit 5, which is a screen shot from WWSB during the live 4 pm newscast on December 30, 2020. All newscasts are available for free online, with no login necessary. 24 Gray Complaint at 6; 47 C.F.R. §§ 76.65(b)(1)(i); (ii). 25 Gray Complaint at 9; 47 C.F.R. § 76.65(b)(4).

9 A. Gray’s Complaint fails to demonstrate that Frontier violated the Commission’s per se objective standards for good faith retransmission consent negotiations.

After rejecting Frontier’s various offers and upset because Frontier would not accept

Gray’s final offer, Gray now claims Frontier failed to meet the per se objective standards for

good faith negotiations. Contrary to Gray’s assertions, Frontier met all of the section 76.65(b) obligations,26 including negotiating retransmission consent and designating a representative with

authority to make binding representations on retransmission consent negotiations.

Section 76.65(b) of the Commission’s rules require broadcasters and multichannel video

programming distributors (“MVPDs”) to, inter alia, negotiate retransmission consent and

designate a representative with authority to make binding representations.27 In adopting the per

se objective standards, the Commission intended to provide “concise, clear” standards where the

proscribed conduct would “constitute a violation of the good faith standard in all possible

instances.”28 With respect to refusing to negotiate, the Commission stated that “[p]rovided that

the parties negotiate in good faith . . . failure to reach agreement does not violate [the

Communications Act].”29 The Commission further stated, with respect to designating a representative with authority to make binding representations on retransmission consent, that the standard is satisfied so long as a “negotiating representative is vested with the authority to make

26 Except for § 76.65(b)(1)(vii), which requires a negotiating entity to execute a written retransmission consent agreement that sets forth the full understanding of the television broadcast station and the MVPD. Neither party met this standard since the parties did not reach a written agreement. 27 47 C.F.R. §§ 76.65(b)(1)(i); (ii). 28 Implementation of the Satellite Home Viewer Improvement Act of 1999: Retransmission Consent Issues, First Report and Order, 15 FCC Rcd 5445, ¶ 31 (2000) (“Good Faith Order”). 29 Good Faith Order, ¶ 40.

10 offers on behalf of the [broadcaster/MVPD] and respond to counteroffers made by [the other party].”30

Commission orders interpretating the good faith rules demonstrate the absurdity of

Gray’s per se claims. In particular, when a party makes multiple counterproposals that were not identical, the Commission has found that this clearly demonstrates negotiating in good faith.31

Here, Frontier engaged Gray in extensive negotiations consisting of the parties trading emails, telephone calls and proposals over 25 days. This extensive discussion and exchange of proposals disproves any suggestion of a refusal to negotiate retransmission consent.32 Moreover, nothing in the good faith retransmission consent rules prohibits a party from adjusting its bargaining position during the course of the negotiation, as circumstances change, especially in light of new evidence that a station did not provide as much value as was previously assumed.33 Frontier’s

30 Id., ¶ 41. 31 HITV License Subsidiary, Inc. v. DIRECTV, LLC, Memorandum Opinion and Order, 33 FCC Rcd. 1137, ¶ 8, n. 33 (2018) (“HITV/DirecTV Order”) (“The record indicates that there were many back-and-forth communications between the parties, including multiple extension agreements to facilitate negotiations. Such discussions clearly demonstrate that there was not a complete refusal to negotiate.”). See also AT&T Services, Inc. v. Deerfield Media, Inc., et al, Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture, 35 FCC Rcd. 10695, ¶ 27 (2019) (commenting on the HITV/DirecTV Order, “In that case . . . the Defendant made multiple offers that would have, if accepted by the Complainant, resulted in carriage of the station in question.”); Holston Connect, LLC v. Nexstar Media Group Inc., Memorandum Opinion and Order, 34 FCC Rcd. 7833, ¶ 7 (2019) (“Holston/Nexstar Order”) (“The record indicates that Nexstar made multiple counterproposals, and that these counterproposals were not identical, clearly demonstrating that Nexstar put forth more than a single, unilateral proposal.”). 32 Coastal Television Broad. Co. LLC v. MTA Commun., LLC, Memorandum Opinion and Order, 33 FCC Rcd. 11025, ¶ 8, n.28 (2018) (“Coastal/MTA Order”) (“The record indicates that the parties' retransmission consent negotiation involved multiple back-and-forth communications. . . . Such discussions clearly demonstrate that there was not a complete refusal to negotiate.”) 33 Coastal/MTA Order, ¶ 9 (“Nor do we find that MTA unreasonably delayed negotiations when it ‘continually presented counter-offers proposing even lower fees than their previous offers,’ which Coastal alleges was ‘clearly designed to delay the resolution of negotiations.’ To the contrary, the record indicates that MTA reasonably adjusted its proposed rates based on feedback from its member owners opposing programming rate increases. Nothing in our good faith retransmission consent rules prohibits a party from adjusting its bargaining position during the course of the negotiation, as circumstances change.”); Holston/Nexstar Order, ¶ 7 (“[N]othing in our good faith retransmission consent rules prohibits a party from adjusting its bargaining position during the course of the negotiation, as circumstances change.”).

11 different rate offers over the 25 days, and change in positions, therefore do not constitute bad

faith.

The evidence further shows that Frontier’s negotiations were real and not “Potemkin

negotiations” or “fake offers.” Gray can only speculate that Frontier’s lead negotiator “had no

authority” and could not “agree to any of the offers she has been making.”34 As described above,

Frontier made multiple offers and counter-offers throughout negotiations and involved senior

management in discussion of these offers.35 Frontier also, as required under Commission rules, continually provided explanations for rejecting Gray’s offers.36 Had Gray accepted any of

Frontier’s offers, they would have found that the offers were real. Only after negotiations were

well underway did Frontier discover that WWSB’s local programming was available for free

online and through WWSB’s mobile application. This changed circumstance is what Frontier’s

lead negotiator referred to when she mentioned that Frontier’s prior offer no longer held the

same value. Gray may be disappointed that Frontier’s December 15th offer was no longer on the

table, but that does not mean that Frontier failed to negotiate in good faith.37 In the end, Frontier

made a business decision to minimize retransmission consent fees when its customers had access

to “must-have” ABC network programming through WFTS. Or, as Gray put it, “[i]f Frontier

decided that carriage of Gray’s stations was no longer economically feasible, Gray respects that

decision.”38 This was indeed the case.

34 Gray Complaint at 8. 35 See Exhibit 2. Frontier’s lead negotiator has authority to negotiate retransmission consent agreements and make binding representations on behalf of the company. 36 47 C.F.R. § 76.65(b)(1)(v). See also Coastal/MTA Order, ¶ 10. (“The good faith rules require a party to ‘provide an explanation for rejecting the other party’s offer but . . . not . . . to justify its explanations by document or evidence.”). 37 ACC Licensee, Inc. v. Shentel Telecommunications Company, Memorandum Opinion and Order, 27 FCC Rcd 7584 (2012) (outlining that once a party makes a counteroffer, the other party is no longer bound to its prior offer). 38 Gray Complaint at 9.

12 Due to the significant Commission precedent supporting Frontier’s good faith conduct, it

is no surprise that the foundation for much of Gray’s arguments relies on the false assumption

that Frontier updated its channel guides several weeks before expiration of the agreement. Gray

contends that a “footer on the last page of lineup” proves that the guide was

created in November 2020.39 Gray takes this spurious position despite noting that Frontier

removed channel guides previously made in October with new Florida and South Carolina

channel guides that stated “effective December 2020.”40 The truth is that these channel guides

were not placed on Frontier’s website until after the agreement expired, as attested to by

Frontier’s Director of Digital Experience.41 Due to the time sensitive nature of the negotiations

and the need to get accurate information in front of subscribers as soon as possible, Frontier representatives neglected to update the date of creation listed at the bottom of the guide.42 The channel guides, therefore, are not evidence of bad faith.

The fact that Frontier declined Gray’s extension offer is also not indicative of bad faith.43

From the onset, Frontier indicated its disinterest in extending negotiations beyond the expiration

of the current agreement. It should have thus come as no surprise to Gray that it would need to

make its best offer by December 18, 2020 at 5 pm. Nor did Gray’s extension come with “no-

strings-attached” as Gray claims.”44 The extension offer was not infinite and would likely have

39 Id. at 8. 40 Id. 41 See Exhibit 1. 42 Id. 43 Coastal/MTA Order, ¶ 5 (“On December 30, 2017, having failed to reach a renewal agreement, [Broadcaster] offered to extend the existing agreement for five days. [Operator] declined the extension offer and made a new offer to [Broadcaster] with a fee proposal lower than what [Operator] had previously offered during renewal negotiations.”). Despite declining the extension offer and offering lower financial terms than previously offered, the Commission found no evidence of bad faith. 44 Gray Complaint at 4.

13 led to customer disruption and confusion over the holidays when Gray surely would have run on-

air messaging (e.g., screen crawls) to notify customers of the potential loss of service. In

addition to the adverse customer impact, Frontier would have faced monetary consequences had

it accepted the extension as well. Retransmission consent and cable programming contracts

generally require payment based on a per-subscriber rate calculated by adding the subscribers as

of the 1st day of the month and the last day of the month divided by two. Because the contract

expired in the middle of the month, only a pro-rated payment was due. Accordingly, Frontier

would have owed Gray payment for the full month had it agreed to the extension rather than the

partial 18 days.

In summary, the burden of proof in a good faith retransmission consent complaint is on

the complainant.45 Gray has not met that burden here, and the Commission should deny the

Complaint.

B. Gray’s Complaint fails to establish that Frontier violated the Commission’s regulations under the totality of the circumstances test.

As described above, Frontier complied with the Commission’s per se objective standards for negotiating retransmission consent in good faith. Gray, therefore, naturally turns to the

Commission’s totality of the circumstances test. Under the totality of the circumstances test, the

Commission will consider complaints when “specific retransmission consent proposals are

sufficiently outrageous.”46 Under this standard, a party may present facts “which, even though

they do not allege a violation of the objective standards, given the totality of the circumstances

45 47 C.F.R. § 76.65(d). 46 Good Faith Order, ¶ 32.

14 reflect an absence of a sincere desire to reach an agreement that is acceptable to both parties and thus constitute a failure to negotiate in good faith.”47

Nothing in Gray’s Complaint indicates “outrageous” behavior that would require

Commission intervention. Gray raises no novel arguments that Frontier violated the totality of the circumstances test. Rather, Gray argues that Frontier’s conduct meets the standard because the negotiations were a “complete charade.”48 Had Gray accepted any of Frontier’s offers it would have discovered this was not a charade. As the Commission famously stated in Mediacom v. Sinclair, “[a]bsent other factors . . . disagreement over the rates, terms and conditions of retransmission consent – even fundamental disagreement – is not indicative of a lack of good faith.”49 This is because the totality of the circumstances test is not intended to serve as a “back door” inquiry into substantive negotiations.50 Commonplace disagreements encountered by negotiating parties in the everyday business world, such as the disagreement on the value of

Gray’s stations here, “will be promptly dismissed,”51 and the Commission should do so here as well.

For the reasons provided above, this claim lacks merit.

IV. DESPITE GRAY’S ATTEMPTS TO OBTAIN COMMISSION FORFEITURES, FRONTIER DID NOT VIOLATE THE COMMISSION’S NOTICE RULES

Contrary to the false assertions in Gray’s Complaint, Frontier timely and accurately notified its customers immediately once Frontier no longer had Gray’s consent to retransmit

47 Id. 48 Gray Complaint at 9. 49 Mediacom/Sinclair Order, ¶ 6. 50 Good Faith Order, ¶ 32. 51 Id.

15 WWSB. The Commission should reject Gray’s attempt to secure Commission forfeitures against

Frontier.

Frontier provided accurate and timely notices in accordance with the Commission’s

Report and Order (“2020 Notice Order”) released in the fall. In the 2020 Notice Order, the

Commission revised its rules to clarify that when a service change occurs due to a retransmission

consent negotiation that falls within the last 30 days of a contract, MVPDs must provide notice

to subscribers “as soon as possible,” rather than 30 days in advance.52 The Commission

interpreted “as soon as possible” to require notice to subscribers “without delay after

negotiations have failed such that the [MVPD] is reasonably certain it will no longer be carrying

the programming at issue.”53 As support, the Commission noted that requiring a notice to

subscribers that a channel may be dropped whenever a retransmission consent renewal

negotiation extends into the final 30 days of an existing contract would cause substantial consumer confusion, and thus would not further the goal of facilitating informed choices.54

It is immediately apparent here that Frontier satisfied its notice obligations. Frontier and

Gray negotiated retransmission consent during the final 30 days of the retransmission consent agreement. Despite Frontier’s best efforts to reach an agreement, including numerous drafts, phone calls and email correspondence over a 25-day negotiation period, in the end the parties could not overcome their fundamental disagreement over WWSB’s value. The day the contract

52 See 2020 Service Change Notification Order. 53 Id., ¶ 11 (emphasis added). 54 Id., ¶ 9. The Commission also specified that a channel slate on the vacant channel that appears after programming has been dropped is a reasonable means to communicate the service change in the immediate aftermath of the channel going dark. Id., ¶ 13 (“[B]ecause these negotiations, by their very nature, often continue until the final minutes of existing contracts, we find that a channel slate could be the most immediate direct form of notice to reach affected subscribers in the event of a last-minute channel deletion. Thus, we conclude that channel slates would satisfy the ‘any reasonable written means’ standard in the specific context of a service change due to retransmission consent . . . renewal negotiations that fail near the end of an existing contract, as they would communicate time- sensitive notice about service changes to the subscribers via the quickest means possible.”).

16 expired, Frontier was still communicating with Gray in an effort to reach an agreement.

Frontier’s lead negotiator reached out to Gray on the morning of expiration and scheduled a call

with Gray at noon.55 Then, Frontier reached out to Gray at 3:12 pm and asked for another call to

discuss at 3:30 pm. Gray’s negotiator was unavailable then, and pushed the call off until 4:00

pm, just one hour prior to the expiration. There was no change in Gray’s rate demand. After this

call, Frontier met internally, and responded to Gray at 4:54 pm, six minutes prior to expiration,

that “financially it doesn’t work for us to have two ABC’s on in one market for all the reasons

that we have previously discussed.”56 As Gray acknowledges in the first sentence of the

Complaint, the decision to drop the stations was made with less than one hour to go.57 In reality,

this decision was made just prior to expiration.

Under the Communications Act, an MVPD may use “any reasonable means at its sole

discretion” to deliver notice of service and rate changes to subscribers.”58 Consistent with

industry practices and the Commission’s recommendations, Frontier notified their subscribers in

the most expedient methods available to them – via a channel slate on the vacant channels, a set-

top box message, email, social media, and through an updated channel guide on Frontier’s

website.59 Through these notices, Frontier accurately advised its Florida customers that WWSB

programming was available via alternative means, either through the national ABC network

55 Exhibit 3, Email 5, dated Dec. 18, 2020 from Ms. Francie Leader to Ms. Claire Ferguson. 56 Id., Email 4, dated Dec. 18, 2020 from Ms. Francie Leader to Ms. Claire Ferguson. 57 Gray Complaint at 1. 58 47 U.S.C. §552(c). 59 See Exhibit 4. See also 2020 Service Change Notification Order, ¶ 13 (“A channel slate on the vacant channel that appears after the programming has been dropped is a reasonable means to communicate the service change to the viewers in the immediate aftermath of the channel going dark.”). The FCC further stated that “[w]e agree with those commentors who assert that channel slates are the most direct form of notice to immediately inform interested subscribers about a channel deletion. We reject the Joint LFAs’ contention that channel slates are an inadequate form of notice on their own because they only become available after the programming has been dropped.” Id.

17 programming on WFTS or the locally produced content, including newscasts, on WWSB’s

website and mobile application.60 In short, Frontier did exactly as Congress and the Commission

instructed and provided notice to customers immediately after it had to remove Gray’s stations,

using as many expedient methods of notice as were available in accordance with Commission

rules.61 Strangely, Gray does not appear to contest Frontier’s notice to customers on its Myrtle

Beach/Charleston system, even though Frontier used the same means to notify subscribers there.

For all the reasons set forth above, Frontier complied with the requirement to notify

subscribers “as soon as possible” by utilizing the quickest, most effective notice methods

available. The Commission must reject Gray’s attempts to secure unwarranted forfeitures

against Frontier.

V. CONCLUSION

Based on the evidence presented in the Good Faith Complaint and this Answer, Gray has

not demonstrated that Frontier failed to negotiate retransmission consent in good faith. The

Commission should deny the Complaint.

60 Contrary to the assertions in Gray’s Complaint, Frontier’s channel slate advised customers that not only was national ABC network programming available on WFTS, but that locally produced content, including newscasts, was available on WWSB’s website and mobile application. 61 It is also important to note that Frontier’s channel slate appeared on WWSB’s former channel for six minutes starting at 5pm (despite the slate’s short appearance, it appeared at the beginning of the 5pm newscast, one of the highest viewed time slots) until Frontier secured WFTS’s permission to simulcast WFTS on that channel, ensuring subscribers could immediately view local programming without changing channels.

18 Respectfully submitted,

By:

Scott C. Friedman Bruce Beard Kelsey Rejko Cinnamon Mueller 1714 Deer Track Trail Suite 230 St. Louis, MO 63131 (314) 394-1535

Attorneys for Citizens Telecom Services Company, LLC d/b/a Frontier Communications

January 11, 2021

19 The signatory has read the Answer to Good Faith Complai nt and, to the best of her

knowledge, information and belief formed after reasonable inquiry, it is well grounded in fact

and is warranted by existing law and is not interposed for any improper purpose.

Francie Leader Citizens Telecom Services Company, LLC d/b/a Frontier Communications 401 Merritt 7 Norwalk, CT 06851

Dated: January 11 , 202 1 Exhibit 1

Exhibit 2

Exhibit 3

Email 1

Email 2

Email 3

Email 4

Email 5

Exhibit 4

Channel Slate

Email Notification-Tampa

Email Notification-Sarasota

Email Notification-South Carolina

Email Notification Performance Statistics

Twitter

Exhibit 5

CERTIFICATE OF SERVICE

I, Alma Hoxha, hereby certify that a true and correct copy of the foregoing Answer to

Good Faith Complaint was sent on January 11, 2021 to the following parties via USPS and e- mail:

Robert J. Folliard, III Claire Magee Ferguson Senior Vice President, Distribution & Assistant General Counsel Government Relations Gray Television Licensee, LLC Gray Television Licensee, LLC Gray Media Group, Inc. Gray Media Group, Inc. 4370 Peachtree Rd. NE 4370 Peachtree Rd. NE , GA 30319 Atlanta, GA 30319 [email protected] [email protected]

Jeffrey Benninghoff Vice President and General Manager of WWSB (TV) 1477 Tenth Street Sarasota, FL 34236

/s/ Alma Hoxha______Alma Hoxha Paralegal Cinnamon Mueller

Dated: January 11, 2021