An FCC Administrative Law Judge has ruled in favor of the Tennis Channel in its program carriage complaint against Comcast.
is according to a copy of the decision by Administrative Law Judge
Richard Sippel. If thte ruling is not overturned by the commission, it will mark the first time a network has prevailed in a
program carriage complaint against a cable operator, and it should mean a big
boost in the number of cable subs that can get the channel.
"It is concluded that Tennis Channel has satisfied its burden of proving
that Comcast Cable engaged in discrimination in the selection, terms or
conditions of carriage on the basis of its non-affiliation with Tennis
channel," Sippel concluded.
Comcast will have to pay $375,000 and is
prohibited from discriminating against Tennis vis-à-vis Versus (NBC Sports Network as of Jan. 2) or Golf Channel, which Sippel determined were similarly situated, and which are
affiliated with Comcast's NBCUniversal.
Tennis currently counts some 30 million subscribers, a total that includes 2.7 million with Comcast. The network's total with the nation's largest distributor could grow sevenfold from the ruling.
Among Sippel's key conclusions:
1. Tennis, Versus and Golf Channel were sufficiently similar--sports channels targeting similar audiences--that disparate treatment constituted discrimination.
2. Comcast's discrimination against Tennis Channel in favor of Golf Channel and Versus was based solely on affiliation. Comcast's explanations for that disparate treatment notwithstanding.
3. Carriage decisions by other MVPDs relative to Tennis to not justify Comcast's placement of the channel on a narrowly penetrated tier.
4. Comcast's disparate treatment unreasonably restrains the channel's ability to compete, including for program rights and what it can charge for advertising.
Sippel did not agree with Tennis Channel that its tier placement threatened its survival, but said that it did not have to show it would go under to show that Comcast had unreasonably restrained its ability to compete.
"This is a long-awaited day for Tennis Channel, and a watershed moment for independent programming networks and viewers who benefit from a true diversity of voices in the American media marketplace," said Ken Solomon,
chairman and CEO, Tennis Channel, in a statement. "Our request has been simple and clear since the beginning: we just want to be treated the same way major operators treat the networks they own that compete with us. From there we're prepared to succeed or fail based on a level playing field."
Sena Fitzmaurice, vice president, government
communications, Comcast Corp., pointed out that the decision is
still subject to review by the full commission and that it will take its
case to an appeals court if necessary.
"We respectfully disagree
with the initial decision that was released today in the FCC case
involving Tennis Channel," said FitzMaurice.
"Comcast has the
contractual right to distribute Tennis Channel as it does currently, and
Comcast firmly believes that the exercise of that right to minimize
costs to consumers is not discrimination. Many other companies with no
ownership interest in Tennis Channel have made similar decisions and
some refuse to carry Tennis Channel at all. Moreover, this decision
purports to supersede an existing contract between two private parties,
which is unprecedented in the program carriage context. The ruling
issued today is only an initial decision, and is subject to further
review by the full Commission and then, if needed, the U.S. Court of
Appeals. We believe it is wrong for Tennis Channel to use the government
to impose higher costs and prices on private enterprise and consumers
and we look forward to the review process."
complaint stems from Comcast's decision to keep the channel on a premium
sports tier, rather than position it on a more broadly distributed programming package.
Tennis had aruged that Comcast was favoring its own similarly
situated networks Versus and Golf by placing them on more widely viewed tiers. Comcast had
countered that Tennis was available to virtually every home it services,
that its freely negotiated contract permits Tennis carrige on a sports
package, and that was honoring those terms.
The FCC designated the complaint for hearing in Oct. 2010, with the Media Bureau concluding that, on its face, Tennis had made its case for discrimination.
mediation of the complaint failed back in November. 2010, triggering the
move of the complaint to Judge Sippel, the FCC's own legal Maytag
repairman as the only administrative law judge at the commission, and
one whose recent high-profile almost-decisions -- involving NFL Network
and MASN, have been preempted by settlements between the parties,
although he did rule against the carriage complaint of Wealth TV.
The FCC made some changes to its program carriage rules back in August
to speed complaints, and allow for true-up payments or standstills, but
those did not apply to complaints already in the pipeline.
Bloomberg, which has its own outstanding complaint against Comcast at the FCC, used the opportunity to try and light a fire under the commission. "Today's decision is further proof of what we already know, that Comcast abuses its dominant position against independent programmers like Bloomberg TV," said Greg Babyak, head of government relations for Bloomberg. "FCC Chairman Genachowski was right to require Comcast, as a condition of approving its acquisition of NBC-Universal, to include independent news channels such as Bloomberg TV where there are news neighborhoods. We urge the FCC to act on Bloomberg's complaint that Comcast is refusing to implement the news neighborhooding condition on the NBC-Universal acquisition."