The Federal Communications Commission's commissioners have reversed a two-year old bureau-level decision and concluded that Time Warner Cable did not discriminate against Mid-Atlantic Sports Network, which means the cable operator won't have to deliver the regional sports network and its Washington Nationals and Baltimore Orioles games to its subs in North Carolina.
The vote, 4-1, with commissioner Michael Copps dissenting, comes over two years after Time Warner Cable challenged an FCC Media Bureau decision to uphold an outside arbiter's finding that it had discriminated against the RSN by not agreeing to carry it on a widely viewed analog tier.
Back in 2008, two outside arbritators and an FCC Media Bureau staff concluded that Time Warner Cable had discriminated, but the agency has now reversed that decision, under then-FCC chairman Kevin Martin, and sided with the MSO, commission sources familiar with the vote confirmed. The order has not yet been made public.
The FCC ordered Time Warner Cable to start carrying MASN on an analog tier back in October 2008, after MASN filed its complaint in July of that year. The operator immediately appealed that decision.
As a condition of its July 2006 decision allowing the top two cable operators, Comcast and Time Warner Cable, to divvy up systems of bankrupt Adelphia Communications, the FCC said that if there was evidence that either buyer was exerting undue market power in denying carriage to an unaffiliated RSN, the complaint could be submitted to outside arbitration.
The operator immediately appealed that decision.
MASN spokesman Todd Webster said he had not yet seen the new order, but if the FCC had changed course, he said, "a decision to reverse the judgments of two independent arbitrators and the FCC's Media Bureau would harm consumers who want nightly baseball in North Carolina and make it virtually impossible for independent programmers to get a fair shake in disputes with vertically integrated cable giants."
He added that it was "hard to imagine how the FCC can both proffer arbitration as the preferred solution to resolving retransmission and carriage disputes, while at the same time gutting the decisions of its arbitrators and Media Bureau.
He would not speculate on what MASN would do, but it could appeal the FCC's decision in court.
A Time Warner Cable spokesperson was not immediately available for comment.
An FCC source said commissioner Copps was concerned that it undermined the condition and did not see a compelling reason for reversing the commission's finding of fact.
Time Warner Cable had argued that since it offered to carry MASN on a digital tier, it was not denying carriage. But an
arbitrator ruled that since only 50% of Time Warner Cable's subscribers were digital and it carried its own
and other RSNs on an analog tier, "this is exactly the kind of discrimination that I think the FCC intended to prevent."
Cable operators have been caught between a regulatory rock and a hard place. Operators have been under pressure from the FCC and legislators not to deny must-have programming, like college and pro sports, to fans accustomed to seeing the action over the air or on basic cable. But at the same time, regulators and legislators have complained about soaring cable prices, which operators point out are linked to programming costs.
A similar arbitration condition is expected to be placed on the Comcast/NBC Universal union and one of the criticisms from deal critics has been the slow-turning wheels of the FCC complaint process.
"We're very pleased that the FCC determined that, as we've said all along, Time Warner Cable did not discriminate against MASN in any way," Time Warner Cable said in a statement. "While it was determined by the FCC that we should not be required to carry MASN, we understand that a segment of our avid sports fans would like to see this programming. We therefore remain willing to carry MASN on our sports tier, and we hope to resume negotiations with MASN in the near future."
The vote to reverse was first reported Wednesday by Communications Daily's Jonathan Make.