Discovery to FCC: We Won't Coordinate Carriage

Say neither it, nor John Malone, have incentive, ability or desire
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Discovery Communications, Inc. (DCI) has promised the FCC it "does not and will not coordinate carriage negotiations or other operations in any way" with Charter, Time Warner Cable or Bright House if the FCC allows them to merge.

That came in comments to the FCC this week in response to concerns that John Malone's interest in DCI and future interest in the combined company, dubbed New Charter, raised concerns about such coordination.

DCI, which is asking the FCC to reject calls—including by the American Cable Association—for the FCC to put conditions on it in connection with the transaction.

DCI says neither it nor Malone have an incentive to engage in anticompetitive behavior—specifically withholding programming from, or raising prices to, other multichannel video programming distributors to drive subs to New Charter because it would hurt both DCI and Malone.

"Withdrawing its programming from an MVPD or attempting to artificially raise its prices to benefit New Charter would cause substantial harm to DCI’s revenues and reputation," the company said, consequences that would be born by partial owner Malone and which could not possibly be offset by an incremental sub gains from such conduct.

Besides, DCI argued, it is not the kind of must-have programming—broadcast nets, regional sports—that could drive a subscriber exodus.

They also said they don't have the ability to carry out the strategy.

DCI said it is already subject to program access rules, and there is no need to add to those via transaction conditions.

"The mere existence of a vertical relationship, however, does not support the imposition of conditions; as the Commission has observed repeatedly, it already has program access rules in place that are specifically designed to address concerns about vertical relationships," Discovery said.

Both the ACA and the Writers Guild of America West had called for conditions to prevent what they argued was an incentive and ability to hurt competing distributors. WGA has asked the FCC to deny the deal.

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