News

Comcast, NFL Network in FCC Limbo

10/17/2008 8:00 PM Eastern

Comcast’s long-running dispute with the NFL Network remains in limbo as regulators at the Federal Communications Commission are split on how to rule.

Comcast distributes the NFL Network on a sports tier seen by about 2 million subscribers. The NFL Network, saying it deserved wider access, filed a discrimination complaint with the agency, which FCC chairman Kevin Martin endorsed on Oct. 10.

The NFL Network claimed that broader distribution was legally required because Versus and the Golf Channel, national sports networks owned by Comcast, were carried on expanded basic, seen in 24 million Comcast subscriber homes.

Martin’s staff prepared an order that required Comcast to expand its carriage of the NFL Network and pay a license fee recommended by an administrative law judge.

But his plan backfired when the other four FCC commissioners refused to go along. In the end, the FCC referred the matter — including just a tentative finding of discrimination — to an ALJ with a 60-day deadline to return with recommendations.

“Certainly, sending it to an ALJ for further factual discovery and analysis, I think, is appropriate,” said FCC Republican Robert McDowell. “I’ve had concerns in other matters that we didn’t conduct our own investigation, such as in the Comcast-BitTorrent proceeding.”

Martin acknowledged that his proposal went down to defeat: “I had proposed … the [Media] Bureau had proposed an item to them that was going to say, 'Hey, they did discriminate and let’s refer it to an ALJ to determine what’s the appropriate price.’ ”

As a result of the FCC’s internal divisions, Paul Gallant, senior vice president of telecommunications and media at the Stanford Group, said it was too soon for the NFL Network to spike the ball in the end zone.

“I’d say it’s still very much an open question whether the commissioners will agree that the NFL Network is equivalent to Versus for purposes of a discrimination complaint,” Gallant said.

Martin’s plan also called for finding that Comcast discriminated against Mid-Atlantic Sports Network (MASN), and that Time Warner Cable, Bright House Networks and Cox Communications discriminated against WealthTV by denying carriage. The ALJ is also reviewing those cases.

“Forcing these networks onto our cable systems will cost consumers millions of dollars and cause cable prices to rise. We look forward to detailing our pro-consumer actions and the particulars of these cases, including the freely entered contracts that the NFL Network and MASN signed, which the parties now seek to upend by unnecessary government intervention in the programming marketplace,” said Sena Fitzmaurice, Comcast’s senior director of corporate communications and government affairs.

After the ALJ rules in mid-December, the five FCC members would still need to evaluate the decision and produce a ruling. But that could get postponed for months as a result of likely departures at the FCC.

In early January, FCC Republican Deborah Taylor Tate is required to leave. If Barack Obama is elected president, he is likely to replace Martin immediately, if he hasn’t already resigned.

That would leave the FCC with three members — Republican McDowell and Democrats Michael Copps and Jonathan Adelstein. They could decide not to act until the agency is fully staffed.

Comcast and the NFL Network are in court over whether the cable operator had the contractual right to place the channel on a sports tier. At the same time, they’re engaged in mediation.

“We still believe that this should be settled at the negotiating table. Ultimately, that’s what’s in the best interest of all parties, most particularly the consumers. We would like to engage in a dialogue,” NFL Commissioner Roger Goodell said last week.

September