Editorial: Net Gain - Broadcasting & Cable

Editorial: Net Gain

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The Supreme Court recently gave the FCC a boost by concluding that it was to be given deference on interpretations of its statutory authority where it was unclear—sort of the government equivalent of saying “the tie goes to the runner.” But deference, of course, does not mean the court abdicates its responsibility to rein in a regulator if it has reached a conclusion not supported by the evidence.

That point was made loud and clear last week by a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, which overturned the FCC’s finding that Comcast had discriminated against Tennis Channel. The court found that neither Tennis Channel, in lodging the complaint, nor the FCC, in defending its decision to find for Tennis Channel, had come close to meeting the evidentiary burden.

That burden was to prove that Comcast discriminated against Tennis Channel for anticompetitive purposes. Cable operators are allowed to discriminate against programmers, so long as it is not to favor their own co-owned channels. Comcast’s contention was that its rejection of Tennis Channel’s proposal to be carried on a more widely viewed tier—it is carried on a sports tier that costs extra—was “simply a straight-up financial analysis.” And according to the new opinion, written by Judge Stephen Williams, the Tennis Channel presented no evidence to counter Comcast’s contention. So long as that was the case, the FCC should not have ruled as it did.

The judge did suggest that there were avenues Tennis Channel or the FCC could have explored, ones that might have born fruit; Judge Williams said neither chose to go there. “Conceivably,” Williams said, “Tennis could have shown that the incremental losses from carrying Tennis in a broad tier would be the same as or less than the incremental losses Comcast was incurring from carrying Golf and Versus in such tiers.” But, said the court, neither the FCC nor Tennis Channel “even hint at this possibility, nor analyze its implications.”

Williams also said that neither Tennis Channel nor the FCC had suggested that Comcast’s “valid business consideration” had been “merely pretextual cover for some deeper discriminatory purpose.”

Tennis Channel has pledged to appeal the decision, but it will be an uphill climb. If it seeks a full court review of the three-judge decision, the fact that that decision was unanimous makes that appeal somewhat less likely to be granted, according to a veteran attorney who has argued before the court. And if Tennis Channel takes it to the Supreme Court, Williams has done that appeal no favors by already pointing out other areas where the case for discrimination might have been made. The High Court tends to avoid appeals that could be resolved in the lower court.

We join in the concurring opinion of Judge Brett Kavanaugh, who wrote: “Under these circumstances, the FCC cannot tell Comcast how to exercise its editorial discretion about what networks to carry any more than the Government can tell Amazon or Politics and Prose or Barnes & Noble what books to sell; or tell The Wall Street Journal or Politico or the Drudge Report what columns to carry; or tell the MLB Network or ESPN or CBS what games to show….”

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