Verizon Weighs In On RSN Access

Push comes after court upheld FCC's ban on exclusive contracts in apartments earlier in week

Looking to strike while the iron is hot, Verizon wrote the FCC commissioners Thursday renewing its call for action to "prevent cable incumbents from denying competitive video providers access to cable-affiliated regional sports networks."

The company made the pitch in a letter to the three commissioners regarding the commission's ongoing review of program access rules, access complaint process, and program-tying arrangements.

The "hot iron," at least in Verizon's view, is this week's court decision upholding the FCC's ban on exclusive contracts in apartments and other multiple-dwelling units.

The ions were hardly dry on the electronic version of the D.C. Appeals court decision when Verizon signaled it saw an opening. "In upholding the ban on new and existing exclusive access deals, the Court's decision also confirms the FCC's authority to address other barriers to more meaningful competitive choice and video competition, such as the cable companies' refusal to provide competitors with access to regional sports programming," Verizon VP deputy General Counsel Michael Glover said in a statement e-mailed to B&C following the decision.

The letter to the commissioners, also from Glover, essentially echoed that point in much greater detail, and called on the FCC to "take action now" both on carriage of the sports nets and on carriage in HD.

Cable operators who also own regional sports networks and, more importantly, often control rights to the local sports teams' games, are not required to make those networks available to the competition if they are delivered terrestrially, the so-called loophole in the requirement that owners of satellite-delivered networks make them available.

"As the D.C. Circuit's NCTA decision from earlier this week confirms," wrote Glover, "the Commission's legal authority to ensure that competitors have access to this 'must have' sports programming is solid."

The commission is considering whether to close that "loophole," but it has historically interpreted the provision as excluding terrestrial nets from the access provision.

The National Cable & Telecommunications Association was not ready to give Verizon any new purchase on their long-standing argument.

"In today's competitive video marketplace, consumers benefit when providers can differentiate their products and force each other to continue innovating and improving,” said NCTA spokesman Brian Dietz. “We see no reason for the government to reverse the innovation and competition that is providing consumers more choice and better service than ever before."

AT&T also took the opportunity to try and leverage the decision in their ongoing carrige battle with Cox.

The company, which filed a complaint against Cox for denying it access to Padres games, said that incumbent operators were, “actively walling off competition to consumers living in apartments and condos through these exclusive access arrangements," adding: “This decision recognizes the FCC's authority and prohibits unfair practices by cable companies that limit competition and consumer choice for video service."

Cox, not surprisingly, saw it quite differently. "AT&T is off-base in their claim that this week's D.C. Circuit decision confirming FCC authority to ban exclusive agreements for multiple dwelling unit properties (MDUs) also confirms a statutory basis for FCC action on AT&T's program access complaint against Cox," said Cox Director of Communications David Grabert in an e-mail. "Cox embraces the opportunity to compete and also to provide service offerings that differentiate us from our competitors. We created Channel 4 San Diego as a local channel from the ground up more than 12 years ago, and it represents millions of dollars of investment. In addition to the Padres, Channel 4 San Diego features a range of local content from high school academic competition to local cooking shows. AT&T does not need a short-cut to developing a competitive video service rich in local content, and AT&T is no stranger to exclusivity itself, as shown by its agreement with Apple for the iPhone."