Justice Dept. Investigating Verizon and AT&T Complaints Against Cable Ops

Companies claim operators are preventing them from buying sports programming

By John Eggerton -- Broadcasting & Cable, 7/26/2009 10:45:00 AM

The Justice Department is investigating complaints by Verizon and AT&T that some top cable operators have been preventing them from buying sports and other programming in which the operators have a financial interest.

That is according to a report in The New York Times.

The Justice Department is already looking into complaints against wireless phone companies over exclusive handset deals.

Verizon and AT&T have complained that cable operators are not making some must-have sports programming available to them.

For example, earlier this month, Verizon filed a complaint against Cablevision over access to HD versions of games of the New York Knicks, New York Rangers, New York Islanders, New Jersey Devils and Buffalo Sabers.

A key issue is that many regional sports nets are delivered via landline, rather than over satellite. While the FCC rules require satellite delivered cable programming to be delivered to competitors at nondiscriminatory prices and terms, it has interpreted the law as not requiring the same access to terrestrially delivered programming--the so-called terrestrial loophole.

The FCC is currently considering what, if any changes, to make to its program access rules, including the terrestrial carve-out.

National Cable & Telecommunications Association President Kyle McSlarrow suggested in response to the Verizon complaint that 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," he said earlier this month. "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."

The FCC also currently has pending a pair of program carriage complaints against major cable operators. The complaints, which have been tried before an FCC administrative law judge, were by Wealth TV against Comcast, Time Warner Cable, Cox Communications and Bright House, and Mid-Atlantic Sports Network (MASN) against Comcast.

A third complaint against Comcast by the NFL Network, which was heard before the same judge, was resolved by the parties before that judge ruled.

The two outstanding complaints have yet to be ruled on, after which that decision becomes a recommendation to the full commission, which still must make the final call.

In a filing with the FCC Friday for its annual report on the state of video competition, Wealth TV suggested Justice might need to get involved, maintaining that cable operators were favoring their own, owned programming, which "may meet the threshold of antitrust violations."

For its part, the FCC's Enforcement Bureau has already concluded that Wealth TV did not even meet the FCC's standard for noncompetitive practices.

It is not clear when the FCC will wind up ruling on the complaints, or whether that will come before or after any changes to the program access regime.