Specter Criticizes Cablevision Absence

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Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) was not happy with the absence of Cablevision from a hearing Thursday on cable sports programming.

He said that they had been given ample notice and was given no reason for their failure to appear. He pointed out that the committee has subpoena power and said he expected cooperation in any future hearings. 

Cablevision said it was sorry. “We apologize for any misunderstanding and did not intend in any way to offend the Senator," company said in a statement. "Based on our understanding of the hearing, we believe our views on these important issues were well represented by the cable industry participants."

Specter's committee continues to eye the cable sports business looking for possible violations of antitrust law.

In a follow-up to a hearing last month in which the NFL got roughed up for an effort to seed its fledgling NFL Network with regular season games, the committee, still headed by Specter through the lame duck session, took another crack at the issue of whether consumers are being fairly treated by sports leagues and cable companies, whether antitrust laws are being violated, or whether the laws need to be adjusted.

Specter was particularly interested in whether Congress should step in to close the so-called terrestrial loophole. Per the 1992 Cable Act, operators must provide programming to multichannel video competitors at reasonable rates. But the requirement applies only to satellite-delivered programming, not to terrestrially-delivered networks.

Another key issue for the committee was the 2007 sunset on the ban on exclusive contracts between cable operators and programmers in which they have an attributable interest. The issue is key for FCC Chairman Kevin Martin, too, who on Wednesday said he wanted the FCC to open an inquiry into whether maintaining that ban was necessary to assure access to programming.

Cablevision may not have been in attendance, but the cable operator side was represented in the person of Comcast EVP David Cohen, who said that rather than extend the ban, it should be allowed to sunset, saying that the cable industry is far less vertically integrated than when the ban was instituted in the 1992 Cable Act. He also said that vertical integration is not necessarily a bad thing, but has instead led to the creation of such networks as CNN, C-SPAN and Discovery.

Cohen called Comcast one of the least vertically integrated operators, with an average ownership interest of only 7% of the networks on its systems, contrasting that with DirecTV, which he said owned some 30% of its networks, including far more sports nets.

Cohen argued that there was "no justification" for the FCC's current program access rules.

Cohen pointed out that Comcast makes its regional sports networks available to all wireline competition and to satellite competitors everywhere but in Philadelphia. That is becase the Philadelphia sports net is delivered via landline and so falls under the exemption.

So, is Comcast using that exemption as a loophole in this case to withhold access to satellite in the one place it can. Well, yes, but Cohen points out that satellite operator DirecTV also has an exclusive deal with the NFL for its Sunday Ticket package of games that Comcast does not have access to. It's sauce for the goose and gander, he said, that Comcast does not make its sports net available to satellite in Philly for the same competitive reasons.

Mark Cooper of the Consumer Federation of America said that rising cable prices, discrimination in program provision and anti-consumer bundling of programming were all justifications for program access rules, saying cable operators had built barriers to entry. He said that cable should be required to unbundle its programming, allowing consumers to provide some market discipline on the cable industry.

While the FCC has placed program-access conditions on the mergers of DirecTV and News Corp. and the divvying up of Adelphia between Comcast and Time Warner, James Baller of the Baller Herbst Group, a law firm that represents state and local governments on telecommunications issues, said that protecting access on a merger-by-merger basis was not sufficient, and that Congress needed to pass unambiguous program-access laws.

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