Verizon has filed a program-access complaint with the FCC against Cablevision, saying that the cable operator should be compelled to sell HD programming from its Madison Square Garden Network to the telco and its FiOS multichannel video service.
Verizon said the company has "intentionally and unlawfully" refused to make that unique programming available. The unique programming it is focused on includes the New York Knicks, New York Rangers, New York Islanders, New Jersey Devils and Buffalo Sabres. The Knicks basketball team and Rangers hockey team play home games in Madison Square Garden (pictured).
Verizon said that Cablevision has told analysts that its own carriage of the programming in HD is a competitive advantage.
The Federal Communications Commission has said that coverage of local sports teams is the kind of must-have programming for which there is not a ready substitute.
Cablevision does sell the programming to Verizon in standard definition, but Verizon said that was only after it filed a similar access complaint and complaints that with growing demand for HD sports, the high-definition versions should be considered similar must-have programming.
"MSG complies fully with federal regulations, which do not require us to license our local HD programming to anyone," Madison Square Garden Network said in a statement. "MSG is glad to have Verizon as a customer of our satellite-delivered programming, which has provided them with access to every single game on MSG and MSG Plus."
By contrast, the HD versions are delivered terrestrially. The FCC requires satellite-delivered programming owned by MSOs to be made available to competitors, but does not require the same access to terrestrially delivered programming per the so-called "terrestrial loophole."
One of the issues the FCC is currently considering is whether or not to close that so-called terrestrial loophole.
National Cable & Telecommunications Association President Kyle McSlarrow said he was not surprised by Verizon's complaint, pointing out that it had been trying to make that argument for a couple of years. But he suggested the government was already ranging too far afield as it is.
"It is a remarkable intrusion into the marketplace for the government with the program access rules to determine who can sell what to whom," McSlarrow said. "All of these companies should be trying to invest in new products and services and differentiate themselves from their competitors. Our competitors can do that just as surely as we do."
Verizon has asked for a decision out of the commission within five months.
By late afternoon Wednesday, Cablevision had added an exclamation point to its defense of its programming strategy with a counterattack on Verizon.
"Cablevision functions in the most competitive environment in the country and the idea that a phone company more than 10 times our size needs a regulatory bailout is absurd," the company said in a statement. "The phone company's problems are due to things like copycat products, poor customer service, confusing bills and long-term contracts filled with fees and excessive termination penalties."