Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 1 of 34
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`NEXSTAR MEDIA INC.,
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`Plaintiff,
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`v.
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`COMCAST CABLE COMMUNICATIONS,
`LLC,
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`Defendant.
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`Case No.: 1:21-cv-06860-JGK
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`ORAL ARGUMENT REQUESTED
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`MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT COMCAST CABLE
`COMMUNICATIONS, LLC’S MOTION TO STAY OR DISMISS THE COMPLAINT
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`Paul Spagnoletti
`Dana M. Seshens
`Craig J. Bergman
`Alexa B. Lutchen
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`DAVIS POLK & WARDWELL LLP
`450 Lexington Avenue
`New York, New York 10017
`(212) 450-4000
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`Attorneys for Defendant Comcast Cable
`Communications, LLC
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 2 of 34
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`TABLE OF CONTENTS
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`PAGE(S)
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`PRELIMINARY STATEMENT ................................................................................................... 1
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`FACTUAL BACKGROUND ........................................................................................................ 3
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`A. Comcast, Nexstar, and Mission Broadcasting (Nexstar’s “Sidecar”) .................... 3
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`B. Nexstar Divests WPIX and Promises the FCC It Will Not Provide Ongoing
`Services Thereafter ................................................................................................ 4
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`C. Mission Acquires WPIX and Adds It to the Comcast-Mission Agreement .......... 6
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`D. Comcast’s FCC Petition ......................................................................................... 8
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`E. Comcast’s and Nexstar’s Current Dispute over WPIX Licensing Fees ................ 9
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`APPLICABLE STATUTORY AND REGULATORY SCHEME .............................................. 10
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`ARGUMENT ............................................................................................................................... 12
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`I.
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`THIS CASE SHOULD BE STAYED OR DISMISSED WITHOUT PREJUDICE
`UNDER THE PRIMARY JURISDICTION DOCTRINE ........................................... 12
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`A. The Primary Jurisdiction Doctrine ....................................................................... 12
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`B. The FCC and the Court Both Have Jurisdiction Over the Same Issue ................ 14
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`C. All of the Primary Jurisdiction Factors Support a Stay or Dismissal .................. 15
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`1. Determining Whether Nexstar’s Conduct Is Permissible under FCC
`Rules Involves Technical and Policy Questions Within the FCC’s
`Unique Expertise ......................................................................................... 15
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`2.
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`The Question At Issue Is Particularly Within the FCC’s Discretion .......... 19
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`3. Allowing This Case to Proceed Now Would Present A Substantial
`Risk of Inconsistent Rulings ....................................................................... 20
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`4. A Prior Application to the Agency Has Been Made ................................... 21
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`D. The Advantages of Applying the Primary Jurisdiction Doctrine Outweigh
`the Potential Costs................................................................................................ 21
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`II. ALTERNATIVELY, THE COURT SHOULD EXERCISE ITS INHERENT
`AUTHORITY TO STAY THE CASE ......................................................................... 22
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`CONCLUSION ............................................................................................................................ 26
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 3 of 34
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`TABLE OF AUTHORITIES
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`CASES
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`PAGE(S)
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`
`Adarand Constructors, Inc. v. Pena,
`515 U.S. 200 (1995) .................................................................................................................19
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`
`Akran v. United States,
`997 F. Supp. 2d 197 (E.D.N.Y. 2014), aff'd, 581 F. App’x 46 (2d Cir. 2014) ....................... 4-5
`
`Atchison, Topeka & Santa Fe Ry. v. Wichita Bd. of Trade,
`412 U.S. 800 (1973) .................................................................................................................16
`
`Bahl v. N.Y. College of Osteopathic Medicine of N.Y. Inst. of Tech.,
`No. CV 14-4020 (AKT), 2018 WL 4861390 (E.D.N.Y. Sept. 9, 2018) .................................24
`
`Bowling v. Johnson & Johnson,
`No. 17-CV-3982 (AJN), 2018 WL 1587598 (S.D.N.Y. Mar. 28, 2018) ....................................4
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`Canale v. Colgate-Palmolive Co.,
`258 F. Supp. 3d 312 (S.D.N.Y. 2017) ......................................................................................13
`
`
`Catskill Mountains. Chapter of Trout Unlimited, Inc. v. U.S. E.P.A.,
`630 F. Supp. 2d 295 (S.D.N.Y. 2009) ......................................................................................24
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`Charvat v. Echostar Satellite, LLC,
`630 F.3d 459 (6th Cir. 2010) ....................................................................................................18
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`Clark v. Time Warner Cable,
`523 F.3d 1110 (9th Cir. 2008) ............................................................................................13, 19
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`Consol. Rail Corp. v. Nat’l. Ass’n. of Recycling Indus., Inc.,
`449 U.S. 609 (1981) .................................................................................................................16
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`Credit Suisse Sec. (USA) LLC v. Laver,
`18 Civ. 2920, 2019 WL 2325609 (S.D.N.Y. May 29, 2019) ...................................................24
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`Davel Commc’n., Inc. v. Qwest Corp.,
`460 F.3d 1075 (9th Cir. 2006) ..................................................................................................18
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`Ellis v. Tribune Television Co.,
`443 F.3d 71 (2d Cir. 2006) ............................................................................................... passim
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`Est. of Heiser v. Deutsche Bank Tr. Co. Americas,
`11-cv-1608, 2012 WL 2865485 (S.D.N.Y. Jul. 10, 2012),
`aff’d, 2012 WL 5039065 (S.D.N.Y. Oct. 17, 2012) .................................................................25
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`ii
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 4 of 34
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`Far E. Conference v. United States,
`342 U.S. 570 (1952) .................................................................................................................13
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`FCC v. Prometheus Radio Project,
`141 S. Ct. 1150 (2021)..................................................................................................10, 16, 25
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`FTC v. Verity Int’l., Ltd.,
`443 F.3d 48 (2d Cir. 2006) .......................................................................................................19
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`Golden Hill Paugussett Tribe of Indians v. Weicker,
`39 F.3d 51 (2d Cir. 1994) ...................................................................................2, 12, 13, 14, 20
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`Gristede’s Foods, Inc. v. Poospatuck (Unkechauge) Nation,
`06-cv-1260 (KAM), 2009 WL 4981905 (E.D.N.Y. Dec. 10, 2009) ........................................25
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`Int’l. Audiotext Network, Inc. v. Am. Tel. & Tel. Co.,
`62 F.3d 69 (2d Cir. 1995) ...........................................................................................................5
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`In re Kind LLC "Healthy & All Natural" Litig.,
`209 F. Supp. 3d 689 (S.D.N.Y. 2016) ..........................................................................20, 21, 23
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`Landis v. N. Am. Co.,
`299 U.S. 248 (1936) .................................................................................................................22
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`Landri v. Smith,
`14-cv-9233, 2016 WL 828139 (S.D.N.Y. Feb. 29, 2016) ........................................................22
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`In re Literary Works in Elec. Databases Copyright Litig.,
`No. M–21–90, MDL 1379, 2001 WL 204212 (S.D.N.Y Mar. 1, 2001) ..................................23
`
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`Loftus v. Signpost Inc.,
`464 F. Supp. 3d 524 (S.D.N.Y. 2020) ................................................................................23, 25
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`Louis Vuitton Malletier S.A. v. LY USA, Inc.,
`676 F.3d 83 (2d Cir. 2012) .......................................................................................................22
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`MCI Telecomm’s. Corp. v. Dominican Commc’n. Corp.,
`984 F. Supp. 185 (S.D.N.Y. 1997) ...........................................................................................18
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`Metro Broad. v. FCC,
`497 U.S. 547 (1990) .................................................................................................................19
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`Mical Commc’ns. v. Sprint Telemedia, Inc.,
`1 F.3d 1031 (10th Cir. 1993) ....................................................................................................20
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`Nat’l Commc’ns. Ass’n. v. AT&T Co.,
`46 F.3d 220 (2d Cir. 1995) .......................................................................................................15
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 5 of 34
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`In re Nextwave Pers. Commc’n.s, Inc.,
`200 F.3d 43 (2d Cir. 1999) .......................................................................................................19
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`Niehaus v. AT&T Corp.,
`218 F. Supp. 2d 531 (S.D.N.Y. 2002) ......................................................................................18
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`N.Y. State Elec. & Gas Corp. v. N.Y. Indep. Sys. Operator, Inc.,
`168 F. Supp. 2d 23 (N.D.N.Y. 2001) ..................................................................................17, 21
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`
`Palmer v. Amazon.com, Inc.,
`498 F. Supp. 3d 359 (E.D.N.Y. 2020) ......................................................................................12
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`Poppel v. Rockefeller Univ. Hosp.,
`19-CV-1403, 2019 WL 3334476 (S.D.N.Y. July 25, 2019).....................................................22
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`Readick v. Avis Budget Grp., Inc.,
`12-cv-3988, 2014 WL 1683799 (S.D.N.Y. Apr. 28, 2014) ................................................23, 24
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`Sprint Corp. v. Evans,
`846 F. Supp. 1497 (M.D. Ala. 1994) ........................................................................................17
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`Telstar Resource Grp., Inc. v. MCI, Inc.,
`476 F. Supp. 2d 261 (S.D.N.Y. 2007) ......................................................................................19
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`Thompson v. Fluent, Inc.,
`20-CV-2680, 2020 WL 8642144 (S.D.N.Y. Nov. 29, 2020) ....................................... 23-24, 25
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`Town of Riverhead v. CSC Acquisition-NY, Inc.,
`618 F. Supp. 2d 256 (E.D.N.Y. 2009) ..................................................................... 18-19, 20-21
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`Vortex Commc’ns, Inc. v. Am. Tel. & Tel. Co.,
`828 F. Supp. 19 (S.D.N.Y. 1993) .............................................................................................18
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`W. Union Int’l., Inc. v. W. Union Tel. Co.,
`441 N.Y.S.2d 764 (Sup. Ct. N.Y. Cty. 1981) ...........................................................................21
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`STATUTES & RULES
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`47 C.F.R. § 1.2 ...............................................................................................................................14
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`47 C.F.R. § 73.3555 .......................................................................................................................11
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`47 U.S.C. § 73.3555(e) ....................................................................................................................4
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`47 U.S.C. § 154(i)-(j) .....................................................................................................................14
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 6 of 34
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`47 U.S.C. § 308(b) .........................................................................................................................14
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`47 U.S.C. § 309 ..............................................................................................................................16
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`47 U.S.C. § 310(d) ...............................................................................................................5, 10, 16
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`Fed. R. Civ. P. 12(b)(6)....................................................................................................................1
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`Telecomms. Act of 1996, Pub. L. No. 104-104, § 202(c)(1), 110 Stat. 56, 111 ............................14
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`OTHER AUTHORITIES
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`2002 Biennial Regulatory Review-Review of the Commission’s Broadcast Ownership Rules and
`Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, et al.,
`Report and Order and Notice of Proposed Rulemaking, 18 FCC Rcd. 13620 (2003) .......11, 16
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`Amendment of Section 73.3555(e) of the Commission’s Rules, National Television Multiple
`Ownership Rule, 31 FCC Rcd. 10213 (2016) ............................................................................5
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`Applications of Tribune Media Company (Transferor) and Sinclair Broadcast Group, Inc.
`(Transferee) for Transfer of Control of Tribune Media Company and Certain Subsidiaries,
`WDCD(TV) et al. for Assignment of Certain Licenses from Tribune Media Company and
`Certain Subsidiaries, Hearing Designation Order, 33 FCC Rcd. 6830 (2018) .................12, 17
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`Consent to Transfer Control of Certain License Subsidiaries of NBI Holdings, LLC to Terrier
`Media Buyer, Inc., et al., Memorandum Opinion and Order,
`34 FCC Rcd. 10554 (MB 2019) ...............................................................................................11
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`Entertainment Media Trust, Dennis J. Watkins, Trustee, et al., Hearing Designation Order and
`Notice of Opportunity for Hearing, 34 FCC Rcd. 4351 (MB 2019)............................10, 11, 16
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`Gray Television Inc., Parent of Gray Television Licensee, LLC, Licensee of Stations KYES-TV,
`Anchorage, AK and KTUU-TV, Anchorage, AK, Notice of Apparent Liability for Forfeiture,
`FCC 21-81 (July 7, 2021) ........................................................................................................17
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`In the Matter of Amend. of Section 73.3555(e) of the Commission’s Rules, Nat’l. Television
`Multiple Ownership Rule, 31 FCC Rcd. 10213 (2016) ...........................................................10
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`
`In the Matter of the Applications of Tribune Media Company (Transferor) and Nexstar Media
`Group, Inc. (Transferee), et al., No. BTCCDT-20190107ADJBA, 2019 WL 4440126 (Sept.
`16, 2019) ......................................................................................................................4, 5, 6, 10
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`
`Letter from Tom Wheeler, Chairman, FCC, to Hon. John D. Rockefeller IV et al. (Mar. 27,
`2014), https://docs.fcc.gov/public/attachments/DOC-326470A1.pdf .......................................5
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`
`Phil Verveer, How the Sidecar Business Model Works, FCC.gov Blog, (March 6, 2014),
`https://www.fcc.gov/news-events/blog/2014/03/06/how-sidecar-business-model-works ....3, 5
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`Stereo Broadcasters, Inc. Station WLIR (FM), Garden City, N.Y. for Renewal of Broadcast
`License, Memorandum Opinion and Order, 55 F.C.C.2d 819 (1975) ...............................11, 16
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 8 of 34
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`Defendant Comcast Cable Communications, LLC (“Defendant” or “Comcast”)
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`respectfully submits this memorandum of law in support of its motion to stay the above-
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`captioned action or, in the alternative, to dismiss without prejudice under Federal Rule of Civil
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`Procedure 12(b)(6) the complaint (“Complaint”) filed by Plaintiff Nexstar Media Inc. (“Plaintiff”
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`or “Nexstar”), pending resolution of Comcast’s first-filed petition before the Federal
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`Communications Commission (“FCC”).
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`PRELIMINARY STATEMENT
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`This action involves complex, highly factual, and policy-driven questions concerning the
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`application of FCC regulations, policies, and prior orders—questions that are pending before the
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`FCC pursuant to a petition Comcast filed weeks before this litigation commenced. Nexstar’s
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`sole claim in this case is that Comcast allegedly breached the parties’ retransmission agreement
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`by not paying Nexstar fees for Comcast’s retransmission of the broadcast television station
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`WPIX. As a threshold matter, however, Nexstar is not entitled to any fees under the express
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`terms of that agreement if Nexstar “is prohibited from negotiating for retransmission consent”
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`for WPIX under the “FCC’s Rules.” Because, as Comcast contends, Nexstar exercises de facto
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`control over WPIX, it has an “attributable ownership interest” in the station that causes Nexstar
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`to violate the FCC’s national ownership cap for broadcast stations and the FCC’s own prior
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`orders concerning WPIX ownership—thereby prohibiting Nexstar from negotiating for WPIX
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`retransmission consent. Whether Nexstar exercises such control and is in violation of any FCC
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`rules and/or orders are the very questions that Comcast’s petition asks the FCC to consider. If
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`the FCC agrees with Comcast, then Nexstar’s claim here disappears.
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`As the expert agency with responsibility for issuing and enforcing the rules and
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`regulations for the broadcast television industry, Comcast respectfully submits that the FCC is
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 9 of 34
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`best positioned to consider in the first instance whether Nexstar’s conduct with respect to WPIX
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`has violated those rules and regulations. This is especially true where, as here, this determination
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`raises broad public policy questions that implicate the public interest and there already is a
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`petition pending before the FCC that raises the very questions that this Court otherwise would
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`have to address. Under such circumstances, the prudent course is to stay this case or dismiss it
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`without prejudice—either pursuant to the primary jurisdiction doctrine or the sound exercise of
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`this Court’s discretion—pending resolution of these questions by the FCC.
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`The “primary jurisdiction doctrine” allows courts to stay, or dismiss without prejudice,
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`any claim that is “originally cognizable in the courts” but whose “enforcement . . . requires, or is
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`materially aided by, the resolution of threshold issues, usually of a factual nature, which are
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`placed within the special competence of [an] administrative body.” Golden Hill Paugussett
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`Tribe of Indians v. Weicker, 39 F.3d 51, 58–59 (2d Cir. 1994). That is precisely the case here.
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`Each of the four factors that courts consider when determining whether to apply the doctrine
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`weighs in favor of staying or dismissing the case without prejudice: (i) the threshold questions
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`concerning Nexstar’s compliance with FCC Rules involve “technical or policy considerations
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`within the agency’s particular field of expertise,” as opposed to falling squarely within
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`conventional judicial expertise; (ii) the questions are ones “particularly within the [FCC’s]
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`discretion;” (iii) there exists a “substantial danger of inconsistent rulings,” especially given that
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`that the very questions about Nexstar’s conduct implicated in this case are already before the
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`FCC for consideration; and (iv) a “prior application to the [FCC] has been made.” Ellis v.
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`Tribune Television Co., 443 F.3d 71, 82–83 (2d Cir. 2006).
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`Accordingly, for these reasons and for the reasons set forth herein, the Court should stay
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`this case, or, in the alternative, dismiss it without prejudice, while the FCC determines the key
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`threshold issues.
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`2
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 10 of 34
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`FACTUAL BACKGROUND
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`A.
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`Comcast, Nexstar, and Mission Broadcasting (Nexstar’s “Sidecar”)
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`Comcast is a multichannel video programming distributor (“MVPD”) that carries
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`television content licensed from third parties on its cable systems throughout the United States.
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`Nexstar is the largest broadcast television station group owner in the country. It contracts with
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`MVPDs such as Comcast to carry its stations’ broadcast signals to markets around the country in
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`exchange for fees pursuant to so-called “retransmission consent agreements.” (Compl. ¶ 1.)
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`Mission Broadcasting Inc. (“Mission”) is a broadcast station group that has a long-term
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`“sidecar” arrangement with Nexstar. A sidecar arrangement is a programming, marketing,
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`and/or related service arrangement between a broadcast station group and another broadcast
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`station group, which typically allows one station group to exercise some degree of operational
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`and financial influence over, perform basic operational functions for, and/or receive financial
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`benefits from the sidecar station owned by the other group.1 As part of Nexstar’s and Mission’s
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`sidecar arrangement, they enter into: (i) local marketing agreements, through which Nexstar
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`programs the Mission stations’ broadcast time, sells the stations’ advertising time, and retains the
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`stations’ advertising revenue; and (ii) shared services agreements, whereby Nexstar provides
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`technical, production and other operational services to Mission stations in exchange for
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`Nexstar’s right to receive certain payments. (Nexstar Media Group, Inc., 2020 Annual Report
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`(Form 10-K) at F-9.)
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`Comcast is party to separate retransmission consent agreements with Nexstar and with
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`Mission, both effective January 1, 2020. (Compl. ¶¶ 2, 28 (the “Comcast-Nexstar Agreement”
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`1 Phil Verveer, How the Sidecar Business Model Works, FCC.gov Blog, (March 6, 2014),
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`https://www.fcc.gov/news-events/blog/2014/03/06/how-sidecar-business-model-works (“Verveer Blog”).
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`3
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 11 of 34
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`and “Comcast-Mission Agreement,” respectively.) As pertinent here,
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`Additional Stations. In the event that during the Term hereof, [Nexstar] becomes
`the licensee, programmer, and/or bona fide manager of (or otherwise obtains an
`ownership interest in or enters into a contract to provide certain services, including
`but not limited to shared services, local marketing and/or joint sales agreement(s),
`with) a television station(s) other than a Station and [Nexstar] is not prohibited
`from negotiating for retransmission consent on behalf of such station under
`FCC’s Rules (each, an “Additional Station(s)”), such Additional Station(s) shall be
`added to this Agreement as of the date of consummation of the relationship with
`such Additional Station(s) and shall be subject to the same terms and conditions as
`those applicable to the Stations, and any Operator Cable System(s) or MVPD
`system(s) that retransmits such Additional Station(s)’s Signals(s) shall be added to
`this Agreement as a System with respect to such Additional Station(s). Upon the
`date an Additional Station(s) is added under this Agreement, any other agreement
`with respect to such Additional Station(s) shall be deemed terminated with respect
`to such Additional Stations and the System(s) carrying such Additional Station(s)’s
`Signal(s), notwithstanding anything contained in any such other agreement.
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`(Compl. ¶¶ 16-17 (quoting Comcast-Nexstar Agreement § 6(c)) (emphasis added).) (Declaration
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`of Michael Nissenblatt in Support of Defendant Comcast Cable Communications, LLC’s Motion
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`to Stay or Dismiss the Complaint (“Nissenblatt Decl.”) ¶¶ 4, 9, 11, 12; (Ex. 1 (FCC Petition for
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`Declaratory Ruling dated July 1, 2021 (“FCC Petition”) Attachment A (Dec. 30, 2020 Letter).)
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`B.
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`Nexstar Divests WPIX and Promises the FCC It Will Not
`Provide Ongoing Services Thereafter
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`In 2019, Nexstar sought to acquire the broadcast stations of Tribune Media Company
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`(“Tribune”). In the Matter of the Applications of Tribune Media Company (Transferor) and
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`Nexstar Media Group, Inc. (Transferee), et al., No. BTCCDT-20190107ADJBA, 2019 WL
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`4440126, at *2 (Sept. 16, 2019) (“Nexstar/Tribune Order”).2 The FCC must approve the transfer
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`2 The Court may take judicial notice of the Nexstar/Tribune Order, which is a matter of public record. See Bowling
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`v. Johnson & Johnson, No. 17-CV-3982 (AJN), 2018 WL 1587598, at *4 (S.D.N.Y. Mar. 28, 2018); Akran v.
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`4
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 12 of 34
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`of broadcast station licenses as part of such an acquisition, pursuant to its authority to administer,
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`implement, and enforce the Telecommunications and Federal Communications Acts. 47 U.S.C.
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`§ 310(d). The FCC also is responsible for enforcing the “National Ownership Cap” applicable to
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`broadcast stations, which currently “restrict[s]” to 39% “the total percentage of households a
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`single entity could reach nationwide.” Amendment of Section 73.3555(e) of the Commission’s
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`Rules, National Television Multiple Ownership Rule, 31 FCC Rcd. 10213 (2016). Because the
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`FCC has put in place limits such as the National Ownership Cap, station groups enter into
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`sidecar arrangements such as those discussed above, which enable station groups to provide
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`services for stations they are otherwise not permitted to own.3
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`Upon closing the Tribune transaction, Nexstar would have violated the National
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`Ownership Cap absent a divestiture of some of its broadcast stations. Nexstar/Tribune Order,
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`2019 WL 4440126, at *3. To remain in compliance, Nexstar agreed to divest three stations,
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`including WPIX, which Nexstar divested to Scripps Media, Inc. (“Scripps”). Nexstar/Tribune
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`United States, 997 F. Supp. 2d 197, 203 (E.D.N.Y.), aff’d, 581 F. App’x 46 (2d Cir. 2014). The Court also may
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`consider documents incorporated by reference in the Complaint, such as Comcast’s pending petition to the FCC,
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`discussed in greater detail below. See Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir.
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`1995).
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`3 See Verveer Blog (explaining that the sidecar business model “is used primarily in markets where one entity would
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`not be allowed to hold more than one television license” and “[p]art of the model’s utility involves overcoming a rule
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`that is designed to promote competition, diversity, and localism”); Letter from Tom Wheeler, Chairman, FCC, to Hon.
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`John D. Rockefeller IV et al., (Mar. 27, 2014), https://docs.fcc.gov/public/attachments/DOC-326470A1.pdf
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`(“Wheeler Letter”) at 4 (discussing sidecar arrangement and stating that the FCC “should not permit . . . a policy
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`originally designed to assist efficiency-creating arrangements in furtherance of the public interest [to] be hijacked to
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`become a process that permits entities to regularly evade both the letter and spirit of the Commission’s rules”).
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`5
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 13 of 34
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`Order, 2019 WL 4440126, at *3. These divestitures reduced Nexstar’s national audience reach
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`to 38.2965%, just below the 39% Cap. (Ex. 1 (FCC Petition) at 27.) As part of its application to
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`the FCC, Nexstar represented that it would “not be providing ongoing services under sharing
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`agreements (JSAs, local marketing agreements (‘LMAs’) or shared services agreements
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`(‘SSAs’)) to any of the stations that it is divesting,” including WPIX. Nexstar/Tribune Order,
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`2019 WL 4440126, at *5 n.65. In the Nexstar/Tribune Order, the FCC expressly relied on
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`Nexstar’s commitment to eschew any such arrangements with WPIX, among others, finding that
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`it “moot[ed]” any need for a prohibition against post-divestiture sidecar agreements. Id. at *5
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`n.65, App. B.
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`C. Mission Acquires WPIX and Adds It to the Comcast-Mission Agreement
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`When it divested WPIX to Scripps, Nexstar retained an option to repurchase the station.
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`But after it became clear the FCC would not raise the National Ownership Cap, Nexstar assigned
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`that option to Mission, which acquired WPIX on December 30, 2020. (Ex. 1 (FCC Petition) at
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`3–4, 18 n.46.) That same day, Nexstar and Mission executed a Local Programming and
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`Marketing Agreement (“LPMA”), which, among other things, gave Nexstar the right to program
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`WPIX 24 hours per day, to sell all of the station’s advertising time, and to receive 100 percent of
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`the station’s revenues. (Id. at 4, Exhibit 1 (LPMA).) The LPMA did not grant Nexstar the right
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`to negotiate retransmission consent on behalf of WPIX or otherwise make clear that Nexstar
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`would claim any authority to do so going forward. (Id. at 5.) On that record, the FCC’s Media
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`Bureau approved Mission’s acquisition of WPIX. (See Compl. ¶¶ 6, 23.)
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`Following its standard procedure upon acquiring a new station,
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` (Ex. 1 (FCC Petition) Attachment A (Dec. 30, 2020 Letter);
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`6
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 14 of 34
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`Nissenblatt Decl. ¶ 9.) Several months later, on April 8, 2021,
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`Attachment B (April 8, 2021 Letter); Nissenblatt Decl. ¶ 10.)4 Comcast responded to Nexstar on
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`April 16, 2021,
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` (Ex. 1 (FCC Petition)
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`Petition) Attachment C (April 16, 2021 Letter); Nissenblatt Decl.) ¶ 12.)
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`On April 26, 2021, Nexstar responded,
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` (Ex. 1 (FCC
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` (Ex. 1 (FCC
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`Petition) Attachment D (April 26, 2021 Letter); Nissenblatt Decl. ¶ 13.) On June 15, 2021,
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`4
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` (Ex. 1 (FCC Petition) Attachment B (April 8, 2021 Letter); Nissenblatt Decl. ¶ 10.)
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`Decl.) ¶ 11.)
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` (Ex. 1 (FCC Petition) Attachment C (April 16, 2021 Letter); Nissenblatt
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`7
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 15 of 34
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` (Ex. 1 (FCC Petition) Attachment F (June 15, 2021 Letter);
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`Nissenblatt Decl. ¶ 15.)
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`D.
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`Comcast’s FCC Petition
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`On July 1, 2021, Comcast filed the FCC Petition, asking the agency to find that, under
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`applicable FCC rules and precedent, Nexstar has an “attributable interest” in WPIX based upon
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`Nexstar’s de facto control over WPIX through its arrangements with Mission. (Ex. 1(FCC
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`Petition) at 1, 4, 8–27.) If Nexstar is deemed to have such an interest, it effectively “owns” the
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`station under the FCC’s rules and thus is in violation of the National Ownership Cap, which
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`would likewise render impermissible its efforts to negotiate retransmission consent rights on
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`behalf of WPIX. (Ex. 1 (FCC Petition) at 26–27.)
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`The Petition further seeks declaratory relief that the Nexstar-Mission-WPIX
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`“arrangement” violates the express commitments Nexstar made to the FCC for approval of
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`Nexstar’s acquisition of Tribune—that Nexstar would divest ownership and control of WPIX and
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`not enter into any services/sidecar agreements related to the station. (Ex. 1 (FCC Petition) at 26-
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`27, 30-32, see supra at 4-6.)
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`Finally, the Petition seeks a determination that Nexstar’s conduct undermines the
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`integrity of the broadcast-station-ownership rules and the FCC’s transaction review authority,
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`and raises broad policy implications for the broadcast programming marketplace, including in
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`relation to programming diversity and programming costs for consumers. (Ex. 1 (FCC Petition)
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`at 26–27, 30–32.) As the FCC Petition makes clear, “Nexstar’s conduct and contractual
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`demands” of Comcast with respect to WPIX are “directly germane to, and intertwined with, the
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`Petition’s request for declaratory rulings on Nexstar’s control/attribution of WPIX, violations of
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`8
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`Case 1:21-cv-06860-JGK Document 21 Filed 09/22/21 Page 16 of 34
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`the national ownership rule and FCC divestiture order, as well as appropriate remedial
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`measures.” (Ex. 1 (FCC Petition) at 17.)
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`Comcast has requested expedited action from the FCC. (Ex. 1 (FCC Petition) at 2, 7–8.)
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` (Nissenblatt Decl. ¶ 17.)
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`E.
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`Comcast’s and Nexstar’s Current Dispute over WPIX Licensing Fees
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`Approximately two weeks after Comcast filed its Petition, Nexstar filed its initial
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`complaint in this action, which Comcast subsequently removed to this Court. (See Dkt. No. 1.)
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`Nexstar asserts a single cause of action for breach of the Comcast-Nexstar Agreement due to
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`Comcast’s alleged non-payment of WPIX licensing fees under that Agreement. Nexstar
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`specifically contends that WPIX is an “Additional Station” under the Comcast-Nexstar
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`Agreement (and not the Comcast-Mission Agreement), even though Mission (and not Nexstar)
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`indisputably owns WPIX and
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` (Ex. 1 (FCC
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`Petition) Exhibit 1 (LPMA) § 3.) But if Nexstar could force WPIX under the Comcast-Nexstar
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`Agreement as an “Additional Station,”
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` (Compl. ¶ 25; Ex. 1 (FCC Petition) at 16.)
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`Critical to the instant dispute and this Motion, the Additional Stations provision makes
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`clear that Nexstar can add WPIX to the Comcast-Nexs