FCC Says First-Year Films Are Covered By Comcast/NBCU OVD Condition

In review of arbitration decision, commission also finds that some exclusive deals trump that requirement

By John Eggerton -- Broadcasting & Cable, 11/14/2012 12:49:19 PM

In a partial defeat and partial victory for the company, the FCC has ruled that NBCU cannot exclude films less than a year old from its Comcast/NBCU Order benchmark condition requiring NBCU to make its content available to competing online video distributors (OVD) if that distributor gets comparable programming from one of NBCU's peers not affiliated with that OVD. But the commission also said that requirement does not extend to such programming or other programing that would breach particular exclusive licensing agreements common to the industry.

NBCU had petitioned the FCC to review an outside arbitration award to Project Concord under that OVD access deal condition. The FCC had to rule by Wednesday, Nov. 14. It originally had a deadline of Sept. 14 to act on the petition per the Comcast/NBCU order, which required it to act within 60 days of filing. But it exercised an option to give itself an additional 60 days.

The arbitrator had concluded that the first-year films are subject to the condition, which the FCC upheld.

"The Media Bureau rejects NBCU's argument that Video Programming as defined in the Comcast/NBCU Order conditions must be read as excluding all films for which less than one year has elapsed since their theatrical release (‘first-year films')," said the FCC, "and concludes that these first-year films are included within the scope of the Benchmark Condition."

An exclusive window, or windows, is general practice for the distribution of new theatricals, but the FCC was not ready to establish all new movies class exempt from the deal condition.

But the commission also concluded that NBCU had demonstrated that making certain films and TV shows available to Project Concord would be a breach of licensing agreements that are common industry practice. The bureau clarified that the standard for meeting that test is "a preponderance of the evidence, based on the language of the relevant licensing agreement and evidence regarding the interpretation of that language, that NBCU's provision of programming to the Online Video Distributor (‘OVD') would constitute a breach of a contract to which Comcast Corporation (‘Comcast') or NBCU is a party, provided that the agreement allegedly breached is 'consistent with reasonable, common industry." It concluded NBCU had provided that preponderance of evidence.

The bureau also ruled that NBCU did not engage in unreasonable conduct during the course of the arbitration. Project Concord had alleged that was the case and had sought to shift attorney's fees and court costs in the arbitration to NBCU.