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Comcast Clips NFL at FCC

11/09/2007 7:00 PM Eastern

Comcast’s refusal to give broad distribution to NFL Network is designed to ensure that only die-hard pigskin fans shoulder the network’s 150% minimum rate hike sought for adding eight pro football games to the pay TV channel’s fall schedule, the cable company told the Federal Communications Commission last Monday.

“Comcast prefers to provide the new high-priced NFL Network to those customers who want it without imposing the additional costs on everyone else, and Comcast has done so — in accordance with the contract to which the NFL agreed,” Comcast said in a Nov. 6 FCC filing.

To maximize license-fee and advertising income, the NFL Network has been pressuring Comcast and Time Warner Cable to put the channel on a digital tier purchased by a majority of subscribers. Comcast has agreed to carriage only on a sports tier that costs between $4.99 and $6.00 per month. Time Warner does not carry the network at all.

The National Football League has launched a negative public-relations campaign against the industry while at the same time seeking regulatory leverage at the FCC and at the state level (see related story).

In September, the NFL-owned network asked the agency to force Comcast to bargain in good faith or face compulsory arbitration initiated by the programmer. The NFL Network claims that pro football’s broad national popularity justifies access to as many cable homes as possible.

The outcome at the FCC could prove interesting. Although cable and TV stations are required to bargain in good faith over carriage, the FCC said it was powerless in late 2006 to impose arbitration when cable operator Mediacom sought it during its protracted retransmission consent battle with TV station owner Sinclair Broadcasting Group.

Comcast said in the FCC filing that the NFL Network’s forced arbitration proposal would require FCC intervention before a violation of federal program carriage laws had been established.

“The [FCC] has no discretion to interpret the statute in this way,” Comcast said.

Comcast also stated the NFL was effectively asking the FCC to illegally use its authority to force the cable company to swallow the network’s license fee demands over any objections Comcast might have. Comcast said Hallmark Channel was guilty of the same maneuver as that basic-cable network seeks higher payments from major operators.

Hallmark, seen in about 85 million homes, receives about 3 cents per month per subscriber from its cable and satellite affiliates. Hallmark’s carriage deals with Comcast, Time Warner and DirecTV expire in December. Although it has not disclosed its new license fee request, Hallmark told the FCC that it gets better ratings than Comcast-owned The Golf Channel, which has a 23-cent license fee.

Hallmark wants a new FCC rule that would require arbitration of carriage disputes.

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