FCC Reverses Decision On MASN's Time Warner Cable Complaint

Cable operator won't have to deliver the regional sports net to its subs in North Carolina
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The FCC's commissioners have reversed a two-year-old
bureau-level decision and concluded that Time Warner Cable (TWC ) did not discriminate
against MASN (Mid-Atlantic Sports Network), which means the cable operator
won't have to deliver the network and its Washington Nationals and Baltimore
Orioles games to its subs in North Carolina.

The vote was 4-1, with Commissioner Michael Copps
dissenting.

That comes over two years after Time Warner challenged an
FCC Media Bureau decision to uphold an outside arbiter's finding that Time
Warner Cable had discriminated against the regional sports net
by not agreeing to
carry it on a widely viewed analog tier.

Two outside arbitrators and an FCC Media Bureau staff
decision back in 2008 concluded that TWC had discriminated, but the FCC
has now reversed that decision, under then FCC Chairman Kevin Martin, and sided
with Time Warner, commission sources familiar with the vote confirmed. The
order has not yet been made public.

As a condition of its July 2006 decision allowing the top
two cable operators, TWC and Comcast, to divvy up systems of bankrupt
Adelphia Communications, the FCC said that if there was evidence that either
buyer was exerting undue market power in denying carriage to an unaffiliated
RSN, the complaint could be submitted to outside arbitration.

An FCC source said Commissioner Copps was concerned
that it undermined the condition and did not see a compelling reason for
reversing the commission's finding of fact.

TWC had argued that since it offered to
carry MASN on a digital tier, it was not denying carriage. But an arbitrator
ruled that since only 50% of Time Warner's subscribers were digital and since
Time Warner carried its own and other RSNs on an analog tier, "This
is exactly the kind of discrimination that I think the FCC [Federal Communications
Commission] intended to prevent."

Cable operators have been caught between a regulatory rock
and a hard place. Operators have been under pressure from the FCC and
legislators not to deny must-have programming, like college and pro sports, to
fans used to getting it over the air or on basic cable. But at the same time,
regulators and legislators have complained about soaring cable prices, which
cable operators point out are linked to programming costs.

A similar arbitration condition is expected to be placed on
the Comcast/NBCU deal and one of the criticisms from deal critics has been the
slow-turning wheels of the FCC complaint process. The FCC ordered Time Warner
to start carrying MASN on an analog tier back in October 2008,
after MASN filed its complaint in July of that year. Time Warner
immediately appealed that decision.

The vote to reverse was first reported Wednesday by Communications Daily's Jonathan Make.
"We're very pleased that the FCC determined that, as we've said all along, Time Warner Cable did not discriminate against MASN in any way," TWC said in a statement. "While it was determined by the FCC that we should not be required to carry MASN, we understand that a segment of our avid sports fans would like to see this programming. We therefore remain willing to carry MASN on our sports tier, and we hope to resume negotiations with MASN in the near future."

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