Washington

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 11/14/2012 12:49:19 PM Eastern

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.

 

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