News

Comcast Vows to Sue FCC Over Tennis Channel Decision

7/30/2012 12:01 AM Eastern

WASHINGTON — The Federal Communications Commission’s
first-ever commission-level vote to uphold a
program-carriage complaint is headed to court following
Comcast’s promise to sue the agency, while the National
Cable & Telecommunications Association and the
two Republican commissioners who voted against the
complaint ripped the
decision publicly and
suggested it could lead
to higher consumer
prices and a lower bar
for FCC intervention
in cable editorial decision-
making.

The FCC last week agreed with a ruling that Comcast
discriminated against the Tennis Channel by placing
it on a more expensive tier. The commission voted
to force Comcast to move the Tennis Channel within
45 days to a tier similar to the one where Comcastowned
NBCUniversal’s Golf Channel and NBC Sports
Network reside.

The FCC has put itself squarely into the editorial decision-
making process, dissenters said, a posture that
could discourage new channels and raise prices.

FCC chairman Julius Genachowski stayed enforcement
of the decision, which had been supported by the
Enforcement Bureau, pointing to the precedential importance
of that decision and how the remedies were
structured.

“There’s a legitimate discussion to be had about
whether more distributors owning content is good,
bad or indifferent in
the long run,” said a cable
industry staffer in
an email to Multichannel
News
, responding
to a Comcast blog on
the decision. “[But] is
it a stretch to say that
a carriage decision by
one distributor of one
channel could have farreaching
implications
for the future of the entertainment business?”

The FCC’s two Republican members certainly don’t
think so. In a joint dissent from the 3-2 party-line vote,
commissioners Robert McDowell and Ajit Pai suggested
higher consumer prices would be the broader impact of the
FCC’s decision that Comcast was out of line in treating Tennis
Channel differently, even though that treatment was essentially
the same as, or even better than, the network got
from other major carriers: “[To] shield themselves from discrimination
complaints, Comcast and other MVPDs will
be more likely to carry networks they do not want, on tiers
with broader penetration and at higher prices than ever before
— at least if they are foolish enough to be willing to
invest in content creation. And the Commission should
not kid itself. These additional programming costs will
come out of the pockets of consumers, not from MVPDs’
bottom lines.”

Cable operators are allowed to discriminate among
channels for a host of reasons, including what they feel
is viewer preference or other business reasons. They just
can’t do so if the reason is to favor their own, similarly
situated channels.

An administrative law judge and the FCC — and Tennis
Channel — concluded Comcast had done just that.
“Today’s decision underscores that Comcast’s power
comes with a concurrent responsibility to see to it that
the freedoms of speech and expression of the diverse
programmers that serve these communities are not stifled simply because they compete with networks that
the sole cable provider in the marketplace happens to
own,” Tennis Channel said last week.

Comcast/NBCU Washington president Kyle
McSlarrow called the FCC’s decision an “archetypical example
of unjustifi able governmental micromanagement”
and said it would drive up programming costs. The decision,
he said, “misapplies Congress’s narrowly tailored
statutory standards for discrimination and competitive
harm, ignores evidence demonstrating that Comcast’s
business decisions with respect to Tennis Channel were
based on unbiased cost-benefit analyses (not improper
discrimination), misreads the statute of limitations and
violates Comcast’s First Amendment rights.”

Notwithstanding, Comcast has 45 days to comply
with the FCC’s order to provide Tennis Channel comparable
carriage to NBCSN and Golf Channel, though
it could ask the court to stay enforcement.

TAKEAWAY

The FCC rules Comcast must
place Tennis Channel on a tier
similar to the one where its
own Golf Channel and NBC
Sports Network reside.

March