Sohn Defends Candor on Locast Settlement to Senate Commerce GOP

Democratic FCC nominee Gigi Sohn again pushed back, in responses released Tuesday to Senate Commerce Committee members’ follow-up questions against claims she hasn't been sufficiently candid about whether she played a role as a board member for Locast operator Sports Fans Coalition (SFC) in securing a revised $700,000 settlement of broadcasters’ lawsuit against the shuttered rebroadcaster (see 2202090070). Sohn got repeated GOP criticism during a second confirmation hearing earlier this month over the Locast settlement process and her January commitment to temporarily recuse herself from some FCC proceedings involving retransmission consent and broadcast copyright matters (see 2201280066). Sohn’s repeat appearance in front of Senate Commerce isn't considered likely to have changed her prospects of getting support only from committee Democrats (see 2202090070).

“I answered” questions from Senate Commerce ranking member Roger Wicker of Mississippi and other committee Republicans about the Locast settlement in December (see 2112010043) “truthfully and within the constraints of the confidentiality provisions of the settlement agreement,” Sohn said in response to a question from Wicker released Tuesday. The confidential settlement terms, which reduced the amount Locast had to pay from $32 million to $700,000, leaked in January (see 2201260056).

“The Locast settlement was to turn over all used equipment and any money left after” SFC “pays its vendors, and all of that money came from amounts collected to fund” Locast “operations,” Sohn said. “In those same questions for the record, I offered that the Committee obtain a copy of the settlement agreement from the parties, which reveals the amount of money that the two parties agreed that SFCNY should pay the networks and describes the legal constraints.” Sohn “would have been happy to meet with any member of the Committee to discuss the settlement agreement on a confidential basis and have offered several meetings to many members of this Committee.”

Sohn said she didn’t discuss the settlement with the White House before President Joe Biden nominated her in October because “my interviews with the White House ended around June 2021, long before the district court made its decision in the Locast litigation and therefore long before settlement in the matter was contemplated. I also did not confer with the FCC or” the Office of Government Ethics “on how to proceed on the Locast matter.” SFC and other parties in the Locast lawsuit signed a term sheet Oct. 12 “setting out the terms of the settlement” that “set the amount of payment” as the “amount remaining in” SFC’s “bank account after paying its landlords and vendors and giving Plaintiffs Locast’s used equipment,” Sohn said.

To give SFC “an incentive to bargain with the vendors and landlords for good deals, the Plaintiffs agreed that if there were $700,000 left in” the operator’s “bank accounts, Plaintiffs would file a formal Satisfaction of Judgment announcing to the world that … financial liability to the networks had been fully satisfied,” Sohn said in response to a question from Senate Commerce Chair Maria Cantwell, D-Wash. The original $32 million settlement amount was included in the public agreement “with the full understanding that” SFC “was never going to pay statutory damages unless they lost at both trial and appeal, costly and uncertain for all parties. It was language insisted upon by the Plaintiffs to deter anybody who might consider starting another service similar to Locast. The fact is that if, after paying its landlords and vendors,” SFC “only had $700,000 left in its bank account, Plaintiffs had agreed to accept that amount as the full settlement payment.”

Sohn told Senate Commerce Republicans her decision to make expanded recusals “was mine alone” and was something she began contemplating after the December confirmation hearing and decided to pursue Jan. 24. “Nobody at the White House advised or encouraged me to develop a recusal proposal or assisted me in developing the recusal,” she said. “I discussed the recusal and its parameters with Committee staff and they were supportive.” Sohn said she got no commitments from any senator or other third party to publicly support her if she recused herself.

“I first considered a narrow recusal” based on “discussions with my outside advisors and Committee staff about what the scope might be, what precedent there was, and whether there might be unintended consequences for me recusing myself,” Sohn said. “I informed the White House of my plan to recuse myself voluntarily shortly before formally submitting the letter, but other than describing the proposal, I did not discuss it with the White House.” She has “no intention to withdraw my voluntary recusal.”

“My decision” on participating in any proceeding that appears to touch on retrans and broadcast copyright issues “would depend on the particular proceeding in question, the status of the proceeding, and the General Counsel’s rationale for authorizing me to participate in the proceeding,” Sohn said. “However, I will note that” former FCC Chairman William Kennard “participated in the docket from which he voluntarily recused after the General Counsel authorized him to participate in that docket.”