An FCC Administrative Law Judge has ruled in favor of the Tennis Channel in its program carriage complaint against Comcast.
That is according to a copy of the decision by Administrative Law Judge Richard Sippel. If it is not overturned by the commission, it will be the first time a programmer has prevailed in a program carriage complaint against a cable operator, both cable operators and program carriage complaint filers and should mean a big boost in the number of cable subs who can get the channel.
"It is concluded that Tennis channel has satisfied its burden of proving that Comcast Cable engaged in discrimination in the selection, terms or conditions of carriage on the basis of its non-affiliation with Tennis channel," Sippel concluded. Comcast will have to pay $375,000 and is prohibited from discriminating against Tennis vis-à-vis Versus or Gold channel, which Sippel concluded were similarly situated, and which are affiliated with Comcast.
Among Sippel's key conclusions:
1. Tennis, Versus and Golf Channel were sufficiently similar--sports channels targeting similar audiences--that disparate treatment constituted discrimination.
2, Comcast's discrimination against Tennis Channel in favor of Golf Channel and Versus was based solely on affiliation. Comcast's explanations for that disparate treatment notwithstanding.
3, Carriage decisions by other MVPDs relative to Tennis to not justify Comcast's placement of the channel on a narrowly penetrated tier.
4, Comcast's disparate treatment unreasonably restrains the channel's ability to compete, including for program rights and what it can charge for advertising.
Sippel did not agree with Tennis Channel that its tier placement threatened its very survival, but said that it did not have to show it would go under to show that Comcast had unreasonably restrained its ability to compete.
"This is a long-awaited day for Tennis Channel, and a watershed moment for independent programming networks and viewers who benefit from a true diversity of voices in the American media marketplace," said Ken Solomon, chairman and CEO, Tennis Channel, in a statement. "Our request has been simple and clear since the beginning: we just want to be treated the same way major operators treat the networks they own that compete with us. From there we're prepared to succeed or fail based on a level playing field."
Sena Fitzmaurice, VP, government communications, Comcast Corporation, pointed out that the decision is still subject to review by the full commission and that it will take its case to an appeals court if necessary.
"We respectfully disagree with the initial decision that was released today in the FCC case involving Tennis Channel," said FitzMaurice.
"Comcast has the contractual right to distribute Tennis Channel as it does currently, and Comcast firmly believes that the exercise of that right to minimize costs to consumers is not discrimination. Many other companies with no ownership interest in Tennis Channel have made similar decisions and some refuse to carry Tennis Channel at all. Moreover, this decision purports to supersede an existing contract between two private parties, which is unprecedented in the program carriage context. The ruling issued today is only an initial decision, and is subject to further review by the full Commission and then, if needed, the U.S. Court of Appeals. We believe it is wrong for Tennis Channel to use the government to impose higher costs and prices on private enterprise and consumers and we look forward to the review process."
The Tennis Channel complaint stems from Comcast's decision to keep the channel on a premium sports tier rather than a more broadly distributed programming tier. Tennis Channel had aruged that Comcast was favoring its own similarly situated networks Versus (NBC Sports Network in January) and Golf Channel by placing them on more widely viewed tiers. Comcast had countered that Tennis was available to virtually every home it services, that its freely negotiated contract permits Tennis carrige on a sports package, and that was honoring those terms.
The FCC designated the complaint for hearing in Oct. 2010, with the Media Bureau concluding that, on its face, Tennis Channel had made its case for discrimination.
Outside mediation of the complaint failed back in Nov. 2010, triggering the move of the complaint to Judge Sippel, the FCC's own legal Maytag repairman as the only administrative law judge at the commission, and one whose recent high-profile almost-decisions -- involving NFL Network and MASN, have been preempted by settlements between the parties, although he did rule against the carriage complaint of Wealth TV.
The FCC made some changes to its program carriage rules back in August to speed complaints, and allow for true-up payments or standstills, but those did not apply to complaints already in the pipeline.
Bloomberg, which has its own outstanding complaint against Comcast at the FCC, used the opportunity to try and light a fire under the commission. "Today's decision is further proof of what we already know, that Comcast abuses its dominant position against independent programmers like Bloomberg TV," said Greg Babyak, head of government relations for Bloomberg. "FCC Chairman Genachowski was right to require Comcast, as a condition of approving its acquisition of NBC-Universal, to include independent news channels such as Bloomberg TV where there are news neighborhoods. We urge the FCC to act on Bloomberg's complaint that Comcast is refusing to implement the news neighborhooding condition on the NBC-Universal acquisition."