Game, Set, Match for Tennis Channel Lawsuit

     WASHINGTON (CN) – Comcast must make Tennis Channel available to basic cable subscribers on the same basis as Comcast-owned Golf Channel and NBC Sports Network, the Federal Communications Commission ruled earlier this week.



     FCC commissioners affirmed a determination by an administrative law judge that Comcast discriminated against Tennis Channel by making it available only through premium cable subscriptions in order to protect Comcast owned Golf Channel and NBC Sports Network from competition.
     The Communications Act prohibits cable operators from giving preferential treatment to networks they own at the expense of unaffiliated vendors.
     The judge found that Comcast consistently carried its own sports channels on basic cable and relegated unaffiliated networks to special sports packages that cost more money and limit market exposure of those networks.
     Comcast had argued that the decision to carry Tennis Channel programming in a premium tier was based on the relatively recent development of the network and a cost-benefit analysis showing that carrying the network on basic cable would cost too much.
     The judge rejected these arguments finding that Comcast placed more recently developed sports networks in which it had an ownership interest into its basic packages and that the cost-benefit analysis failed to consider the increase in revenue from advertising that would result from deeper market penetration of Tennis Channel programming.
     Indeed, the judge found that Comcast was paying “substantially more for carrying Golf Channel and Versus that it would if it were to carry Tennis Channel at the same level of distribution.” Versus has since been renamed NBC Sports Network.
     As to remedy the discrimination the judge recommended that Comcast had to treat distribution of the three networks in the same manner and forfeit $375,000 for its past discrimination.
     Comcast appealed the judge’s determination to the commissioners arguing that it violated the cable operator’s First Amendment rights by imposing a content-based restriction on its programming decisions.
     In a 3-2 decision the commissioner’s upheld the judge’s determinations and proposed remedy and rejected Comcast’s Constitutional arguments.
     The commissioners said Comcast’s First Amendment argument fell flat because neither the judge’s remedy nor the regulations upon which it was based looked at the message conveyed by the three networks. Rather it looked at the similar situation of the three networks in the type of programming, target audience and potential market penetration and the cable operator’s own discrimination based on the business relationship with the networks.
     Quoting from the D.C. Circuit court decision in Cablevision Systems Corporation v. FCC, the commissioners noted that the type of programming offered was a legitimate consideration in determining equal carriage because, “although such regulations ‘might in a formal sense be described as content based’ given that they are triggered by whether the programming at issue involves sports, there is absolutely no evidence, nor even any serious suggestion, that the Commission issued its regulations to disfavor certain messages or ideas.”
     In a stinging dissent, commissioners Robert McDowell and Ajit Pai said that majority was faulting Comcast for not having been the first cable operator to carry Tennis Channel on the same programming tier as Golf Channel and NBC Sports Network.
     Indeed, the dissenters noted every other cable operator that did not have an ownership interest in Tennis Channel also put Golf Channel and NBC Sports Network into their basic packages.
     McDowell and Pai said the decision to force Comcast to carry Tennis Channel set a terrible precedent for other cable operators, known in regulatory language as multichannel video programming distributors, who will feel compelled to add networks to protect themselves against charges of discrimination.
     “Comcast and other MVPDs will be more likely to carry networks they do not want, on tiers with broader penetration, and at higher prices than ever before-at least if they are foolish enough to be willing to invest in content creation. And the Commission should not kid itself.
     These additional programming costs will come out of the pockets of consumers, not from MVPDs’ bottom lines,” McDowell and Pai said.
     The FCC gave Comcast 45 days to comply with its order. The cable giant said in a statement that it would appeal the ruling.

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