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Biden FCC Nominee Settles Case That Spurred GOP Senator’s Fight

Jan. 26, 2022, 10:00 AM

A confidential settlement involving Federal Communications Commission nominee Gigi Sohn appears to undercut a key Republican senator’s stated reason for opposing her nomination.

The delay in confirming Sohn is preventing Democrats from securing a majority at the independent regulatory agency, which would allow them to pursue policies such as reinstating Obama-era net neutrality rules. Republicans say Sohn will pursue heavy-handed regulation and have criticized statements she has made against conservative media outlets.

Senate Commerce Committee ranking member Roger Wicker (R-Miss.)'s stated opposition to Sohn revolves around an October order by a New York federal court shutting down Locast, a nonprofit where the nominee served on the board, according to the public consent decree. Locast, which retransmitted local TV signals over the Internet, was ordered to pay ABC Inc., CBS Corp., NBCUniversal Media, LLC, and Twentieth Century Fox Film Corp. $32 million for illegally streaming their programming.

But since then, the broadcasters agreed to settle for a fraction of the decree — roughly $700,000 in cash and liquidation of used computer servers, according to the nonpublic agreement, a copy of which was obtained by Bloomberg Law. A provision in the settlement states the broadcasters released individuals from liability. Broadcasters agreed to file a satisfaction of judgment by Jan. 27 if all the terms are met.

Sohn signed the confidential agreement on Oct. 27, a day after President Joe Biden announced her nomination.

“Broadcasters... forever and irrevocably release and discharge the additional enjoined parties from... liabilities of every kind and nature, related to the claims, counterclaims, or subject matter of the Locast action,” the settlement states.

Wicker last week said his review of the settlement prompted concerns with Sohn’s possible future financial liability to companies regulated by the FCC and called on committee chair Maria Cantwell (D-Wash.) to hold a second hearing on Sohn. Wicker’s office declined to comment on Tuesday, as did Sohn.

“The possibility of the nominee’s future financial liability to a number of companies regulated by the FCC, and the timing of this settlement in relation to her nomination, demands a full discussion by the committee to ensure that there is a clear understanding of the ability for this nominee to act without any cloud of ethical doubt. The committee needs to hold a new hearing on this matter to provide the nominee an opportunity to fully address these concerns,” Wicker said last week.

The Commerce committee didn’t schedule a vote on Sohn before the last congressional term ended, prompting Biden to renominate her Jan. 4. A spokesperson for Commerce Democrats said a committee vote for Sohn hasn’t yet been scheduled.

The settlement came up during Sohn’s Dec. 1 committee hearing and in post-hearing questions for the record. In her written responses, Sohn didn’t correct Wicker when he asked, “Where did the money come from for the payment of the $32 million settlement in connection with the Locast case?”

“The settlement funds come from amounts collected to fund SFCNY operations after SFCNY pays its vendors,” Sohn responded, referring to Sports Fan Coalition NY, the name Locast operated under.

In questions for the record, Sohn also declined to disclose the details of the settlement to Wicker, referring him to the broadcasters or Sports Fans Coalition.

Broadcasters in the public consent decree were awarded $32 million based on the value of each statutory damage under the Copyright Act. Instead, because Locast was being put out of business, broadcasters based the cash settlement on Locast’s revenue, which totaled $794,159 by the end of fiscal year 2021, the non-profit’s 990 IRS form shows.

To contact the reporter on this story: Maria Curi at mcuri@bloombergindustry.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com