FCC Backs Comcast in Program Dispute

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Washington -- The Federal Communications Commission
probably rekindled a legislative battle by ruling last week that DirecTv Inc. was not
entitled to buy a Philadelphia regional-sports network owned by Comcast Corp.

The FCC ruled that the program-access rules that Congress
adopted in 1992 do not apply in the DirecTv-Comcast dispute.

DirecTv filed a complaint last year alleging that
Comcast's refusal to sell Comcast SportsNet -- a year-old Philadelphia-area
regional-sports network -- violated the program-access laws.

The laws generally require the sale of satellite-delivered
programming owned by cable operators to competing multichannel-video distributors, such as
direct-broadcast satellite or telco services.

Comcast argued that the law exempts SportsNet because it is
distributed by microwave and fiber, rather than by satellite.

DirecTv asserted that because programming on the
regional-sports network that preceded SportsNet had been distributed via satellite,
SportsNet should be covered by the rules.

But the FCC's Cable Services Bureau ruled that the law
was designed to apply "to satellite-cable programming, not programming that was
'previously' satellite-delivered."

The FCC also ruled that Comcast's decision to
distribute Comcast SportsNet via microwave and fiber was not, as DirecTv alleged, an
evasive action, saying that the network was new in almost every respect, and that
nonsatellite distribution was economically justified.

DirecTv spokesman Bob Marsocci termed the decision "a
real loss for our subscribers, as well as for competition."

Comcast's victory might be short-lived, because
Congress may move to amend the law.

"I suspect that we may try to address the
program-access loopholes when we introduce comprehensive satellite-reform legislation next
year," said Ken Johnson, spokesman for Rep. Billy Tauzin (R-La.), chairman of the
House Telecommunications Subcommittee.

Earlier this year, Tauzin introduced a bill that died in
committee, which contained provisions that would have required Comcast to sell SportsNet
to DirecTv.

Washington attorney David Wittenstein of Dow Lohnes &
Albertson, who defended Comcast before the FCC, praised the decision as "a good,
careful and faithful reading" of the 1992 Cable Act, which, he said, permitted cable
operators to create new programming without an obligation to sell it their competitors.

DirecTv has 30 days to seek reconsideration with the CSB or
to appeal to the five FCC commissioners. Marsocci said the company had not decided on its
next course of action.