Four TV broadcasters sue to keep rates secret from public

When the media take the government to court over public records, they’re usually trying to pry the records in question loose on behalf of the public’s right to know.

But this month, the corporate owners of four local television broadcasters separately have sued Click Cable TV – and by extension The News Tribune – to keep records containing their financial agreements with the city-owned cable network secret.

On Friday, Pierce County Superior Court Judge Ronald Culpepper is set to weigh arguments from all sides during a hearing to decide whether the court should grant a preliminary injunction to stop the records from being disclosed to the newspaper. If granted, the order would temporarily halt release of the records pending a full-blown trial over the issue.

The broadcast companies are prepared to contend the records – so-called “retransmission agreements” that detail how much they charge Click to air broadcast signals for KING, KOMO, KIRO, KCPQ and KSTW – contain protected trade secrets that are exempt from public disclosure.

Forcing the release of such highly guarded secrets “would be extraordinary and unprecedented in the industry,” Joan Nicolais, a senior executive with KSTW-owner, CBS, said in a sworn statement to the court.

Not only would disclosure financially harm the broadcasters by undermining their negotiating positions nationwide, but broadcasters speculate it would raise rates for local subscribers of Click and the few other municipally owned cable systems nationwide.

“(B)roadcasters aware of the likelihood that the rates negotiated with such a provider will become public may be inclined to seek a premium over the rate they would have otherwise accepted because other, private operators may seek to use the municipal rate as a ceiling for the rates they should have paid,” Nicolais wrote.

The News Tribune counters that the records aren’t trade secrets, but public contracts that the state’s Public Records Act demands be released in the public’s interest.

“A contract with a public agency is, at least in Washington, subject to public inspection under the (Public Records Act),” James Beck, The News Tribune’s attorney, wrote to the court.

Click’s representatives, who so far have provided the newspaper copies of some of the agreements but with all fee information blacked out, said they’re ready to release the full records should a judge so order it.

But in a court filing, Click General Manager Tenzin Gyaltsen argues against disclosure, saying release of the fee information likely would result in higher rates for customers, hurt Click’s negotiation position, and lead broadcasters to terminate existing agreements or avoid future ones.

Such disclosure “will cause irreparable harm to Click by damaging its competitive position and long-term economic viability,” Gyaltsen said in a sworn declaration.

The legal dispute ignited last month after Click and KOMO TV-owner Fisher Communications announced that a drawn-out contract dispute had been settled – and The News Tribune asked for more details.

On Feb. 1, Click and Fisher announced they’d forged a new retransmission deal after the old agreement had lapsed and a stalemate in negotiations disrupted service for cable customers. For about a month during the impasse, six Fisher channels carried by the cable network – including KOMO – went dark.

The sides pointed fingers at each other during the stalemate. Click claimed Fisher was unfairly trying to gouge the network by demanding exorbitant carriage fees. Fisher countered it was simply trying to assess reasonable charges to help cover its own local broadcasting expenses, as federally allowed.

But when the announcement came that a deal had been struck, neither Click nor Fisher would say exactly what the new agreed-upon retransmission fees were.

Under a 1992 federal law, broadcasters can charge cable providers the per-subscriber fees for carrying their programming. Click officials have said such fees, which are directly billed to Click’s 23,000 subscribers – are now the network’s single biggest operating expense. Click cited such fees as the main reason customers’ cable rates were raised in January, and why those rates likely will be hiked again in July and next year.

But given the lack of details provided by Click and Fisher, no analysis of the new agreement could occur. Customers were left to guess whether Click went to bat for them, as the network claimed, whether KOMO raised its fees excessively or merely charged a market-based increase, and exactly how much more cable subscribers will pay to watch the local ABC affiliate.

Seeking answers to such questions, The News Tribune asked Tacoma Public Utilities on Feb. 4 for details of Click’s new agreement with Fisher. Three days later, the newspaper also requested all retransmission agreements that Click held with any other broadcaster.

The City Attorney’s Office initially had determined the Fisher agreement is “a public document and subject to disclosure,” deputy city attorney Bill Fosbre wrote in a Feb. 22 letter. But Click opted to notify each broadcaster about the TNT’s requests, he added.

Fisher – followed by several other broadcasters – objected to Click’s release of the pricing details, contending they represent proprietary information protected by federal trade secret law.

“Fisher has indicated that if Click … releases an unredacted copy of the Agreement, Click will have materially breached its contract with Fisher and Fisher can terminate service to Click’s customers,” Fosbre wrote. “…This would harm the public and is an untenable position for Click and its customers.”

Four broadcasters – Belo Management Services (parent of KING and KONG), CBS (KSTW), KIRO TV, Inc. (KIRO) and Tribune Broadcasting (KCPQ) – have since sued Click to formally block release of the full records to the newspaper. Fisher also has intervened in the case.

If Culpepper orders the records to be released, lawyers for the broadcasters have said they’ll appeal.