A three-judge panel of a D.C. federal appeals court heard Tennis Channel's challenge to the FCC's inaction on a previous panel's decision overturning the commission's finding that Comcast had discriminated against it.
In essence, the FCC was defending a decision that went against it, or at least the FCC's decision to accept the court's smackdown and move on.
The judges hearing the Tennis appeal in the U.S. Court of Appeals for the D.C. Circuit were Judith Rogers, Cornelia Pillard and Janice Rogers Brown, with Rogers and Pillard doing all the talking, and probing, of arguments on both sides.
Tennis Channel attorney Stephen Weiswasser, of Covington & Burling, argued that the previous court essentially created a new discrimination test, which was not only a showing that Comcast's owned content was benefiting from the weak carriage of a competitor, but that it was foregoing benefit on the distribution side by not carrying the channel more widely. He said that Tennis was arbitrarily denied a chance by the FCC to meet because the commission did not reopen the case and seek comment based on that new test from the court.
Weiswasser said that Tennis could have made that showing if it had known that was on the table, but the FCC's attorney said it was not a new test and that Tennis should have known to provide that evidence of economic discrimination via a cost-benefit analysis at the time given Comcast had produced its own cost-benefit analysis.
To buttress its case for why the court had created a new standard, Weiswasser cited the Game Show Network carriage complaint against Cablevision, which was re-opened by an FCC administrative law judge after the Comcast decision, saying the judge had thought the Tennis Channel decision had created a new test.
In the FCC's initial decision in Tennis Channel, it concluded Comcast had discriminated against Tennis in favor of its own content, but Comcast appealed and a previous, different, panel of the court concluded instead that Comcast had demonstrated a clear business reason—that interest in the channel did not justify the price in sub fees—for doing what it did, a reason which was not sufficiently refuted by Tennis Channel.
FCC attorney Scott Noveck argued Monday that the court had found that Tennis did not provide evidence to refute Comcast's cost-benefit analysis, which the court ultimately looked at in siding with Comcast. The FCC said it did not re-open the case following the court decision because it did not agree with Tennis that the court had set a new standard and that essentially it was not the FCC's fault if the channel had evidence it did not present the first time around. The lawyer also pointed out that case had been going on for six years, and given the congressional mandate to deal with carriage complaints expeditiously, in its discretion decided to accept the court decision and move on.
Tennis Channel lawyer Weiswasser said it was not Tennis channel's fault it had taken six years, or got the "back" of the FCC's discretionary hand.
Comcast's lawyer spoke briefly as an intervenor for the FCC, saying the court created no new test, and just concluded that based on the facts, Tennis had failed to refute Comcast's business case argument for the level of carriage.
Given that Tennis did not meet that evidentiary burden, he suggested, the channel should not get the legal windfall of a do-over.
Weiswasser said they were not looking for a do-over, but for a hearing under the new standard the court had created, citing changed circumstances.
Tennis also suggested the earlier panel had meant for the FCC to take further action. The FCC disagreed, pointing out that if the court had wanted to remand it back for further FCC action, it would have explicitly said so.
An FCC administrative law judge issued a decision against Comcast in December 2011, and the FCC, under then chairman Julius Genachowski, upheld it. A D.C. Federal Court overturned that decision in May 2013, saying there was no evidence that affiliation played a role in the level of carriage Comcast had provided the channel.
After the Supreme Court refused to hear an appeal of the federal appeals court decision, Tennis Channel in March 2014 petitioned the commission to issue a new order resolving what it said were new carriage-complaint tests created by the court.
In a January 2015 five-page decision, the FCC officially reversed the decision against Comcast per the court's findings and rejected the Tennis petition for further proceedings.