[Federal Register: November 3, 2008 (Volume 73, Number 213)]
[Notices]
[Page 65312-65329]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03no08-46]
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FEDERAL COMMUNICATIONS COMMISSION
[MB Docket No. 08-214; DA 08-2269]
Herring Broadcasting, Inc. d/b/a WealthTV, Complainant v. Time
Warner Cable Inc., Defendant; File No. CSR-7709-P; Herring
Broadcasting, Inc. d/b/a WealthTV, Complainant v. Bright House
Networks, LLC, Defendant; File No. CSR-7822-P; Herring Broadcasting,
Inc. d/b/a WealthTV, Complainant v. Cox Communications, Inc.,
Defendant; File No. CSR-7829-P; Herring Broadcasting, Inc. d/b/a
WealthTV, Complainant v. Comcast Corporation, Defendant; File No. CSR-
7907-P; NFL Enterprises LLC, Complainant v. Comcast Cable
Communications, LLC, Defendant; File No. CSR-7876-P; TCR Sports
Broadcasting Holding, L.L.P., d/b/a Mid-Atlantic Sports Network,
Complainant v. Comcast Corporation, Defendant; File No. CSR-8001-P
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document designates six program carriage complaints for a
hearing to resolve the factual disputes with respect to the claims and
to return a recommended decision and a recommended remedy, if
necessary, to the Commission by December 9, 2008.
DATES: Each party to an above-captioned proceeding, in person or by its
attorney, shall file with the Commission, by October 17, 2008, a
written appearance stating that the party will appear on the date fixed
for hearing and present evidence on the issues specified herein. Each
party to an above-captioned proceeding must submit to the Commission,
in writing within ten days of this Order (i.e., by October 20, 2008),
their respective elections as to whether each wishes to proceed to
Alternative Dispute Resolution. In each above-captioned proceeding, the
Administrative Law Judge, within 60 days of this Order (i.e., by
December 9, 2008), will resolve all factual disputes and submit a
recommended decision and remedy, if appropriate.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Steven Broeckaert, Steven.Broeckaert@fcc.gov, or
David Konczal, David.Konczal@fcc.gov, of the Media Bureau, Policy
Division, (202) 418-2120.
SUPPLEMENTARY INFORMATION: This is a summary of the Memorandum Opinion
and Hearing Designation Order, DA 08-2269, adopted and released on
October 10, 2008, and the Erratum thereto, adopted and released on
October 15, 2008. The full text of this document is available for
public inspection and copying during regular business hours in the FCC
Reference Center, Federal Communications Commission, 445 12th Street,
SW., CY-A257, Washington, DC 20554. This document will also be
available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will be
available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The
complete text may be purchased from the Commission's copy contractor,
445 12th Street, SW., Room CY-B402, Washington, DC 20554. To request
this document in accessible formats (computer diskettes, large print,
audio recording, and Braille), send an e-mail to fcc504@fcc.gov or call
the Commission's Consumer and Governmental Affairs Bureau at (202) 418-
0530 (voice), (202) 418-0432 (TTY).
Synopsis of the Order
I. WealthTV Complaints
1. WealthTV is a video programming vendor as defined in Section
616(b) of the Act and Section 76.1300(e) of the Commission's rules.
WealthTV focuses on ``inspirational and aspirational programming about
prosperous and fulfilling lifestyles.'' WealthTV states that it is a
``truly independent stand-alone programming service'' and is not
supported by or affiliated with any MVPD, telephone company, or
broadcaster. WealthTV is currently carried by over 75 MVPDs.
2. WealthTV had filed program carriage complaints against Time
Warner Cable Inc. (``TWC''), Bright House Networks, LLC (``BHN''), Cox
Communications, Inc. (``Cox''), and Comcast Corporation (``Comcast'').
WealthTV asks the Commission to order TWC, BHN, Cox, and Comcast to
provide WealthTV carriage on all TWC, BHN, Cox, and Comcast systems
without delay, pursuant to the terms of a carriage agreement similar to
that accorded to MOJO. To the extent one or more of the systems claim
to lack capacity to add an additional channel, WealthTV asks the
Commission to order the system to delete an affiliated programming
service to accommodate the addition of WealthTV.
3. We note that, at the time WealthTV requested carriage, the
defendants carried MOJO in the relevant cable systems. Although iN
DEMAND recently announced that MOJO will cease operations on December
1, 2008, this does not render moot or discredit WealthTV's
discrimination claim. The fact that MOJO will cease operations in the
future is not relevant to the issue of whether the defendants engaged
in unlawful discrimination during the period that WealthTV sought
carriage. Our conclusion is consistent with the Commission's finding in
other contexts that steps taken by a licensee following a violation do
not eliminate the licensee's responsibility for the period during which
the violation occurred. In addition, if carriage of WealthTV is
ultimately required, the fact that the defendants will no longer be
carrying MOJO on the relevant cable systems indicates that they will
have a vacant channel on which to accommodate WealthTV.
A. WealthTV v. TWC
4. After reviewing the pleadings and supporting documentation filed
by the parties, we find that WealthTV has established a prima facie
showing of discrimination under Section 76.1301(c). TWC is an MVPD and
the second largest cable operator in the nation as measured by number
of subscribers. TWC is affiliated with MOJO, a video programming
vendor. According to TWC, MOJO's orientation is ``exclusively male''
and its principal programming consists of sports, movies,
[[Page 65313]]
music concerts, and reality series. On May 7, 2007, WealthTV provided
TWC with a pre-filing notice pursuant to Section 76.1302(b) of the
Commission's rules informing TWC of its intent to file a program
carriage complaint. On December 20, 2007, WealthTV filed its complaint,
alleging that TWC violated Section 76.1301(c) by refusing to carry
WealthTV while granting carriage to its affiliated MOJO service.
1. Background
5. WealthTV states that it has been seeking carriage on TWC systems
since prior to its launch in June 2004. WealthTV explains that it
proposed to provide its high definition (``HD'') video on demand
(``VOD'') service to TWC free of charge provided that TWC grant it a
``hunting license'' and commit to launch WealthTV in its linear line-up
in one TWC system. TWC rejected this proposal because it was unwilling
to commit to a linear launch on even one system. In December 2007, TWC
offered a compromise whereby it agreed not to launch WealthTV's free HD
VOD service until after it launched WealthTV in its linear line-up in
one system. According to TWC, this proposal was meant to address
WealthTV's concern that TWC could launch its free HD VOD service
without ever launching WealthTV on a linear basis. WealthTV rejected
this proposal because it still did not guarantee a linear launch in
even one system. TWC contends that it offered WealthTV a hunting
license that was similar to the deals it has offered to dozens of other
programmers, including some of its affiliated programmers, and that
WealthTV has accepted a hunting license from other MVPDs that have no
ownership interest in MOJO, such as Charter. As WealthTV explains,
however, its agreement with Charter guarantees a linear launch in a set
number of systems, whereas TWC refused to commit to linear carriage in
even one system. Moreover, WealthTV states that TWC has launched MOJO
on a nationwide basis while it has offered WealthTV only a hunting
license, thereby demonstrating TWC's discriminatory treatment. WealthTV
also states that a hunting license with TWC is meaningless given the
reluctance of TWC's corporate programming group to agree to carriage of
WealthTV even if individual systems desire to carry the network. In its
Motion to Strike, TWC states that, after the filing of the WealthTV
complaint, it acceded to WealthTV's demands and proposed a hunting
license coupled with a firm commitment for linear carriage of WealthTV
on TWC's San Antonio system. In its Reply, WealthTV admits that
discussions between TWC and WealthTV have continued after the filing of
the Complaint, but states that it cannot address these discussions
because the Commission's rules require a Reply to be responsive to
matters contained in the Answer and not contain new matters.
2. Similarly Situated
6. WealthTV has provided the following evidence that MOJO is
``substantially similar to WealthTV'' with respect to programming,
target demographic (affluent males aged 25 to 49), target audience,
look and feel, targeted programming theme, and target advertisers.
7. Similar programming. WealthTV provides examples of similar
programming that both WealthTV and MOJO offer, regarding topics such as
wine, automobiles, sports interviews, food, and electronics. For
example, in June 2004, WealthTV launched Taste! The Beverage Show,
which focuses on educating viewers about wine and spirits; in April
2007, MOJO launched Uncorked, which focuses on the same subject matter.
In June 2004, WealthTV launched Wealth on Wheels, which focuses on the
latest trends in automotive technology; in August 2007, MOJO launched
Test Drive, which focuses on the same subject matter. In June 2004,
WealthTV launched Charlie Jones, Live to Tape, which features
interviews of sports figures; MOJO shows Timeless, which also features
interviews of sports figures. In June 2004, WealthTV launched Taste of
Life, which educates viewers about behind the scenes experiences with
travel, spirits, and food; in June 2006, MOJO launched After Hours,
which focuses on a behind the scenes look at Los Angeles restaurants.
In April 2005, WealthTV launched Innov8, which educates viewers about
new ``gadgets and gizmos''; in December 2006, MOJO launched Geared Up,
which focuses on high-end electronics and technology. WealthTV also
provides an affidavit from Jedd Palmer, a consultant with more than
twenty-five years of experience in the cable industry, who reviewed the
programming schedules of MOJO and WealthTV and concludes that ``the
overwhelming majority of the programming on both networks is the same,
or very, very similar, in subject, type, feel, look and target
audience.'' We conclude that the Palmer Declaration adequately set
forth the basis for its conclusions.
8. Similar target demographics. WealthTV provides evidence that
WealthTV and MOJO both are focused on the same target demographic--
affluent males aged 25 to 49. WealthTV provides the results of a survey
demonstrating that the demographics of WealthTV's viewers are affluent
males aged 25 to 49. We find that the survey results set forth in the
Kersey Declaration adequately set forth the basis for its conclusions.
The results of the survey indicate that 71 percent of WealthTV's
audience is male and 55 percent have incomes greater than $75,000. TWC
provides similar results for MOJO--72 percent of its audience is male
and 61 percent have incomes greater than $75,000. WealthTV also
provides an excerpt from a 2004 presentation where WealthTV described
its programming as geared towards males 25 to 49. WealthTV notes that
the CEO of iN DEMAND has stated that MOJO is for ``men making more than
$100,000 per year.'' MOJO has also used the term ``active affluents''
to describe its target audience. In his declaration, Jedd Palmer
concludes that WealthTV targets the same audience as MOJO based on his
review of marketing materials, press releases, and the networks'
schedules and programming. Descriptions of WealthTV and MOJO's
programming found on their respective Web sites further suggests the
two networks offer similar programming.
9. Similar focus on a targeted audience rather than on general
entertainment. WealthTV explains that iN DEMAND announced the launch of
MOJO in March 2007, almost three years after the launch of WealthTV.
WealthTV notes that, upon the launch of MOJO, TWC agreed to offer the
channel across all of its systems carrying HD. While TWC claims that
the service now known as MOJO was originally launched in 2003 under the
name INHD, before the launch of WealthTV, WealthTV provides evidence
that MOJO did not result from merely a name change and that MOJO is a
targeted programming service whereas INHD was a general entertainment
service. WealthTV notes that the CEO of iN DEMAND stated that INHD
could not survive as ``general entertainment programming,'' thus INHD
was converted into a targeted programming service with similar
programming to WealthTV. In his declaration, Jedd Palmer concludes that
``MOJO is not a general entertainment service, but rather a highly
targeted niche programming service.''
10. Similar target advertisers. WealthTV explains that it targets
the same advertisers as MOJO. WealthTV explains that both WealthTV and
MOJO feature programming on wine and spirits and both networks have
targeted the same advertising agency for Grey Goose Vodka.
[[Page 65314]]
11. TWC disputes that WealthTV and MOJO are similar programming
services or that they have similar target demographics. TWC appears to
be arguing that a complainant must demonstrate that its programming is
identical to an affiliated network in order to demonstrate
discrimination. We find that this is a misreading of the program
carriage statute and our rules.
3. Differential Treatment
12. WealthTV argues that TWC has treated WealthTV differently than
MOJO by carrying MOJO on its systems but refusing to carry WealthTV on
those same systems. While TWC claims that it recently offered WealthTV
a hunting license coupled with a firm commitment for linear carriage of
WealthTV on TWC's San Antonio system, the salient issue for our
analysis is that TWC has launched its affiliated MOJO network on a
nationwide basis but it has refused to carry WealthTV on the same
terms.
4. Harm to Ability to Compete
13. As required by the program carriage statute and our rules,
WealthTV has provided evidence that TWC's refusal to carry WealthTV
restrains its ability to compete fairly. WealthTV provides evidence
that advertisers are not interested in placing advertisements on
programming services that are available to fewer than 20 million
households. Absent carriage on one or both of the largest cable MSOs,
such as TWC or Comcast, a programmer's ability to attract advertisers
is impeded and its long-term financial viability is limited. In
addition, WealthTV provides evidence that TWC has ``quasi monopolies''
in key markets, such as New York and Los Angeles, that are essential to
WealthTV's long-term viability. WealthTV also notes that many MVPDs
refuse to carry a programming service that has been denied carriage by
TWC. WealthTV explains further that TWC's refusal to carry WealthTV has
harmed WealthTV's ability to bargain with advertisers and other cable
systems. TWC argues that WealthTV could meet a 20 million subscriber
benchmark through carriage agreements with other large MVPDs, including
MVPDs with no affiliation with MOJO, such as DIRECTV and DISH Network,
but that WealthTV has failed to reach carriage agreements with these
MVPDs as well. We reject this claim because it would effectively exempt
all MVPDs from program carriage obligations based on the possibility of
carriage on other MVPDs. Moreover, the program carriage provision of
the Act prohibits an MVPD from discriminating against an unaffiliated
programmer regardless of the competition the MVPD faces.
5. Alleged Business and Editorial Justifications for TWC's Refusal to
Carry WealthTV
14. TWC offers a number of alleged business and editorial
justifications for its refusal to carry WealthTV but to carry MOJO.
First, TWC claims that its minority stake in MOJO does not provide a
sufficient basis to influence its decision regarding carriage of
WealthTV. A determination whether the program carriage rules have been
violated does not turn on whether or not TWC has a minority stake in
the affiliated programmer, but rather it focuses on the factors we have
identified above. Indeed, TWC admits that its interest in MOJO
satisfies the attribution threshold, thus the program carriage rules
apply to its conduct regarding carriage of MOJO.
15. Second, TWC claims that the video marketplace is competitive
and that no MVPD can afford to keep ``a programming service with
attractive pricing and content off its systems based on ownership if
doing so would cost it subscribers.'' We reject this claim because it
would effectively require a program carriage complainant to demonstrate
that an MVPD's failure to carry its service will cause subscribers to
switch to other MVPDs that do carry the service. This is not a
requirement of the program carriage statute or our rules. In addition,
because TWC carries an affiliated programming service, MOJO, that
provides programming that is substantially similar to WealthTV, there
is even less reason for TWC's subscribers to switch to a competitor
that carries WealthTV.
16. Third, TWC states that its decision to carry a channel depends
on capacity constraints; the proven track record of success of the
channel; the experience of the channel's management team; the
subscriber interest in the channel; input from TWC's division
management; and the terms offered by the channel. TWC argues that
WealthTV has no proven audience demand and is led by individuals with
no experience in creating a national cable network. WealthTV, on its
behalf, has provided evidence demonstrating that it is an established
channel with experienced management and proven consumer appeal, as
demonstrated by: (i) Its linear carriage on 75 MVPDs to date; (ii) a
sampling of e-mails from viewers reflecting their support for the
channel; (iii) the interest in the channel expressed by representatives
of individual TWC systems; and (iv) the decision of TWC's San Antonio
system to launch WealthTV's HD VOD service in March 2007.
17. Fourth, TWC states that it made the same business decision as
many other MVPDs, including Direct Broadcast Satellite (``DBS'')
operators DIRECTV and DISH Network, that WealthTV did not warrant
carriage given the terms it was demanding. WealthTV explains, however,
that the decision of DBS operators to refrain from carrying WealthTV is
irrelevant because they do not carry MOJO either.
6. Conclusion
18. We conclude that WealthTV has established a prima facie showing
that TWC has discriminated against WealthTV in violation of the program
carriage rules.
B. WealthTV v. BHN
19. After reviewing the pleadings and supporting documentation
filed by the parties, we find that WealthTV has established prima facie
showing of discrimination under Section 76.1301(c). BHN is an MVPD and
the sixth largest cable operator in the nation as measured by number of
subscribers. BHN is affiliated with MOJO, a video programming vendor.
According to BHN, MOJO's orientation is ``exclusively male'' and is
principal programming consists of sports, movies, music concerts, and
reality series. On May 15, 2007, WealthTV provided BHN with a pre-
filing notice pursuant to Section 76.1302(b) of the Commission's rules
informing BHN of its intent to file a program carriage complaint. As
discussed further below, on March 13, 2008, WealthTV filed its
complaint, alleging that BHN violated Section 76.1301(c) by refusing to
carry WealthTV while granting carriage to its affiliated MOJO service.
1. Background
20. WealthTV states that it has been seeking carriage on BHN
systems since the summer of 2004. WealthTV describes its visits with
BHN representatives in leading markets and claims that representatives
of several BHN systems, including those in the Tampa Bay market,
expressed an interest in carrying WealthTV, especially because Verizon
FIOS TV offered WealthTV in both standard digital and HD formats in
Tampa Bay. WealthTV claims that Anne Stith, formerly BHN's Director of
Product Marketing for the Tampa Division, told WealthTV's President in
July 2006 that BHN would like to launch WealthTV as soon as WealthTV
completed a deal with TWC. WealthTV also notes that it
[[Page 65315]]
was making its service available for free through 2008. BHN and Ms.
Stith, however, state that Ms. Stith had no authority to make
programming commitments on behalf of BHN and that most programmers
understood that BHN was covered by the programming agreements
negotiated by TWC. Moreover, Ms. Stith states that her inquiries of
WealthTV were purely for purposes of research and that she never made
statements indicating that BHN would be interested in carrying
WealthTV. When WealthTV's Vice President of Affiliate Relations, John
Scaro, contacted BHN's President, Steve Miron, Mr. Miron informed Mr.
Scaro that BHN is covered by the programming agreements that TWC
negotiates with national networks and that further direct negotiations
with BHN would not be an efficient use of time. Based on this, WealthTV
concludes that BHN was prepared to carry WealthTV but for the absence
of a carriage agreement with TWC. WealthTV states that BHN thus
completely refused to negotiate with WealthTV. WealthTV states the BHN
is required to comply with the program carriage rules and cannot use
its reliance on TWC to negotiate programming agreements as a defense.
2. Similarly Situated
21. WealthTV provides similar evidence submitted in connection with
its complaint against TWC purporting to demonstrate that WealthTV and
MOJO are similarly situated. BHN notes some general dissimilarities
between specific programming on WealthTV and MOJO. BHN appears to be
arguing that a complainant must demonstrate that its programming is
identical to an affiliated network in order to demonstrate
discrimination. We find that this is a misreading of the program
carriage statute and our rules.
3. Differential Treatment
22. WealthTV argues that BHN has treated WealthTV differently by
carrying MOJO on its systems but refusing to carry WealthTV on those
same systems.
4. Harm to Ability To Compete
23. As required by the program carriage statute and our rules,
WealthTV has provided evidence that BHN's refusal to carry WealthTV
restrains its ability to compete fairly. WealthTV notes that BHN's
decision to carry MOJO but to deny carriage to WealthTV provides MOJO
with a first mover advantage with respect to the viewers and
advertisers each network targets. WealthTV also explains that an
independent channel must be available to at least 20 million
subscribers in order to attract national advertisers and to achieve
financial viability. WealthTV states that the inability to obtain
carriage on BHN systems makes it more difficult for independent
programmers to reach this level of subscribership. WealthTV also
alleges that obtaining carriage in major markets where BHN owns cable
systems, such as Tampa and Orlando, is essential for attracting
advertisers. According to WealthTV, many MVPDs refuse to carry a
programming service that has been denied carriage by TWC and BHN. In
addition, WealthTV states that BHN's refusal to carry WealthTV has
harmed WealthTV's ability to bargain with advertisers and other cable
systems.
24. In response, BHN argues that carriage on its systems is not
necessary in order to reach the 20 million subscriber benchmark. The
program carriage rules, however, apply to all MVPDs, regardless of
their subscriber base. BHN claims that WealthTV could meet this
benchmark through carriage agreements with other MVPDs, including MVPDs
with no affiliation with MOJO, such as DIRECTV and DISH Network, but
that WealthTV has failed to reach carriage agreements with these MVPDs
as well. We reject this claim because it would effectively exempt all
MVPDs from program carriage obligations based on the possibility of
carriage on other MVPDs. Moreover, the program carriage provision of
the Act prohibits an MVPD from discriminating against an unaffiliated
programmer regardless of the competition the MVPD faces. While BHN
asserts that the 20 million subscriber benchmark cannot apply to an HD
network such as WealthTV because there are fewer than 20 million HD
customers nationwide, WealthTV responds that its HD feed is also
available as a downconverted standard definition (``SD'') feed that can
be viewed by all subscribers. While BHN notes that WealthTV has been
operational for four years despite the lack of a carriage agreement
with BHN, we agree with WealthTV that the more pertinent consideration
is its ability to compete over the long term absent a carriage
agreement with BHN.
5. Alleged Business and Editorial Justifications for BHN's Refusal To
Carry WealthTV
25. BHN offers a number of alleged business and editorial
justifications for its refusal to carry WealthTV but to carry MOJO.
First, BHN claims that its five percent economic interest in MOJO does
not provide a sufficient basis to influence its decision regarding
carriage of WealthTV. BHN admits, however, that its interest in MOJO
satisfies the attribution threshold, thus the program carriage rules
apply to its conduct regarding carriage of MOJO.
26. Second, BHN claims that the video marketplace is competitive
and that ``customers will take their business elsewhere if BHN fails to
offer them desirable services at a fair price.'' We reject this claim
because it would effectively require a program carriage complainant to
demonstrate that an MVPD's failure to carry the service will cause
subscribers to switch to other MVPDs that do carry the service. In
addition, because BHN carries its affiliated programming service, MOJO,
that provides programming that is substantially similar to WealthTV,
there is even less reason for BHN's subscribers to switch to a
competitor that carries WealthTV.
27. Third, BHN claims that its negotiations reflect ``sound
business and editorial judgment.'' Specifically, BHN states that its
decision to carry a channel depends on capacity constraints; whether
the channel is carried by competitors; the experience of the channel's
management team; the overall product mix of the BHN system; subscriber
demand for the channel; input from BHN's division management; and the
terms offered by the channel. BHN contends that WealthTV has no proven
consumer demand and is managed by individuals with no experience in
launching successful networks. WealthTV, for its part, has provided
evidence demonstrating that it is an established channel with
experienced management and proven consumer appeal, as demonstrated by:
(i) Its linear carriage on 75 MVPDs to date; (ii) a sampling of e-mails
from viewers reflecting their support for the channel; and (iii) the
interest in the channel expressed by representatives of individual BHN
systems. WealthTV also provides the results of an independent survey
which reports that WealthTV's HD VOD product ranked fourth out of
twenty HD services.
28. Fourth, BHN contends that virtually all of the MVPDs that do
not carry WealthTV are not affiliated with MOJO, again demonstrating
that decisions regarding carriage of WealthTV are not based on
affiliation. For example, BHN notes that DBS operators, DIRECTV and
DISH Network, do not carry WealthTV. WealthTV explains that the
decision of DBS operators to refrain from carrying WealthTV is
irrelevant because they do not carry MOJO either. Moreover, WealthTV
notes that Verizon, BHN's wireline competitor in Tampa, carries
WealthTV but not MOJO. In any event,
[[Page 65316]]
we agree with WealthTV that the salient fact is that each owner of the
cable-affiliated MOJO network has refused to carry WealthTV, and a
discrimination claim requires the Commission to assess why these cable
operators have refused to carry WealthTV but have decided to carry
MOJO.
6. Conclusion
29. We conclude that WealthTV has established a prima facie that
BHN has discriminated against WealthTV in violation of the program
carriage rules.
C. WealthTV v. Cox
30. After reviewing the pleadings and supporting documentation
filed by the parties, we find that WealthTV established a prima facie
showing of discrimination under Section 76.1301(c). Cox is an MVPD and
the third largest cable operator in the nation. Cox is affiliated with
MOJO, a video programming vendor. According to Cox, MOJO's orientation
is ``exclusively male'' and its principal programming consists of
sports, movies, music concerts, and reality series. On May 7, 2007,
WealthTV provided Cox with a pre-filing notice pursuant to Section
76.1302(b) of the Commission's rules informing Cox of its intent to
file a program carriage complaint. As discussed further below, on March
27, 2008, WealthTV filed its complaint, alleging that Cox violated
Section 76.1301(c) by refusing to carry WealthTV while granting
carriage to its affiliated MOJO service.
1. Background
31. WealthTV states that it has been seeking carriage on Cox
systems since the summer of 2004, but that Cox has refused to negotiate
in good faith. WealthTV discusses its visits with representatives of
individual Cox systems in leading markets during 2004 and 2005 and
claims that some of these systems expressed a strong desire to carry
WealthTV. Cox states that its programming negotiations are conducted at
the corporate level and provides declarations from representatives of
individual Cox systems stating that they informed WealthTV that all
carriage decisions are made by Cox's corporate programming department.
Cox states that it informed WealthTV at a May 2005 meeting that the
interest expressed by a few individual systems was insufficient to
justify carriage of WealthTV and that it was denying carriage to
WealthTV. WealthTV states that it considered Cox's comments to be a
form of bargaining and that Cox did not state that a final decision had
been made to deny carriage to WealthTV.
2. Procedural Issues
32. Cox contends that the WealthTV complaint is barred by the
program carriage statute of limitations because the complaint does not
allege any act by Cox occurring within one year of the Complaint or the
pre-filing notice. Rather, according to Cox, the last formal contact
between WealthTV and Cox alleged in the complaint occurred no later
than a June 7, 2005 letter; thus, Cox claims that the statute of
limitations required WealthTV to file its complaint no later than June
7, 2006. We reject Cox's claim for the following reasons. First,
WealthTV states that Cox never expressed a final decision to deny
carriage to WealthTV and provides evidence that communications between
Cox and WealthTV continued after June 2005. To further support its
claim that the Complaint was filed in accordance with the statute of
limitations, WealthTV explains that it was not until May 2006, one year
prior to the pre-filing notice, when Cox refused to carry the multicast
stream of a Las Vegas CBS affiliate that proposed to broadcast WealthTV
programming. Cox argues, however, that this incident did not involve
direct communication between Cox and WealthTV. WealthTV, however,
claims that Leo Brennan of Cox-Las Vegas informed WealthTV of this
decision in mid-May 2006. Second, WealthTV states that it was not until
the launch of MOJO in March 2007 and the failure of subsequent carriage
discussions when it became obvious to WealthTV that Cox intended to
favor its affiliated MOJO service. Third, the plain language of the
Commission's rules provides that the statute of limitations is
satisfied if the program carriage complaint is filed within one year of
the pre-filing notice, which WealthTV has done in this case.
3. Similarly Situated
33. WealthTV provides similar evidence submitted in connection with
its complaint against TWC purporting to demonstrate that WealthTV and
MOJO are similarly situated. Cox notes some general dissimilarities
between specific programming on WealthTV and MOJO. Cox appears to be
arguing that a complainant must demonstrate that its programming is
identical to an affiliated network in order to demonstrate
discrimination. We find that this is a misreading of the program
carriage statute and our rules.
4. Differential Treatment
34. WealthTV argues that Cox has treated WealthTV differently by
carrying MOJO on its systems but refusing to carry WealthTV on those
same systems.
5. Harm to Ability To Compete
35. As required by the program carriage statute and our rules,
WealthTV has provided evidence that Cox's refusal to carry WealthTV
restrains its ability to compete fairly. WealthTV explains that Cox's
decision to carry MOJO but to deny carriage to WealthTV provides MOJO
with a first mover advantage with respect to the viewers and
advertisers each network targets. WealthTV also submits that an
independent channel must be available to at least 20 million
subscribers in order to attract national advertisers and to achieve
financial viability. WealthTV states that the inability to obtain
carriage on Cox systems makes it more difficult for independent
programmers to reach this level of subscribership. In addition,
WealthTV explains that obtaining carriage in major markets where Cox
owns or operates systems, such as Central Florida, New England,
Phoenix, and San Diego, is essential for attracting advertisers.
According to WealthTV, many MVPDs refuse to carry a programming service
that has been denied carriage by Cox. In addition, Cox's refusal to
carry WealthTV has harmed WealthTV's ability to bargain with
advertisers and other cable systems.
36. In response, Cox does not dispute that 20 million subscribers
are needed for a channel to achieve long-term viability, but states
that it serves approximately six million MVPD households, thereby
making carriage on its systems not necessary in order to reach the 20
million subscriber benchmark. The program carriage rules, however,
apply to all MVPDs, regardless of their subscriber base. Cox also
claims that WealthTV could meet this benchmark through carriage
agreements with other MVPDs, including MVPDs with no affiliation with
MOJO, such as DIRECTV and DISH Network, but that WealthTV has failed to
reach carriage agreements with these MVPDs as well. We reject this
claim because it would effectively exempt all MVPDs from program
carriage obligations based on the possibility of carriage on other
MVPDs. Moreover, the program carriage provision of the Act prohibits an
MVPD from discriminating against an unaffiliated programmer regardless
of the competition the MVPD faces. Cox also asserts that the 20 million
subscriber benchmark cannot apply to
[[Page 65317]]
an HD network such as WealthTV because there are fewer than 20 million
HD customers nationwide. WealthTV explains, however, that its HD feed
is also available as a downconverted SD feed that can be viewed by all
subscribers. While Cox notes that WealthTV has obtained carriage on a
number of MVPDs despite the lack of a carriage agreement with Cox, we
agree with WealthTV that the more pertinent consideration is its
ability to compete over the long term absent a carriage agreement with
Cox.
6. Alleged Business and Editorial Justifications for Cox's Refusal To
Carry WealthTV
37. Cox offers a number of alleged business and editorial
justifications for its refusal to carry WealthTV but to carry MOJO.
First, Cox claims that its minority interest in MOJO does not provide a
sufficient basis for Cox to decline to carry WealthTV. Cox admits,
however, that its interest in MOJO satisfies the attribution threshold,
thus the program carriage rules apply to its conduct regarding carriage
of MOJO.
38. Second, Cox claims that it declined to carry WealthTV based on
``sound business considerations and reasonable editorial judgment.''
Specifically, Cox states that its decision to carry a channel depends
on the following criteria: Likely viewer appeal; the quality of the
programming; whether the channel has a proven track record of
attracting viewers or is associated with an established brand; the
likelihood of the channel's success considering its management team and
business plan; bandwidth management; proposed terms of carriage; the
local needs of Cox's cable systems; and whether the channel has a
regional appeal that might be attractive to certain systems. Cox claims
that WealthTV does not justify carriage based on these criteria.
WealthTV argues that it satisfies Cox's selection criteria. For
example, WealthTV asserts that it is an established channel with
experienced management; offered very favorable terms for carriage; and
that Cox's alleged concern regarding bandwidth constraints from
carrying an HD channel are not a valid concern because WealthTV was
offering SD digital and VOD products in addition to HD. WealthTV also
provides evidence that it has proven viewer appeal, as demonstrated by:
(i) Its linear carriage on 75 MVPDs to date; (ii) a sampling of e-mails
from viewers reflecting their support for the channel; (iii) the
interest in the channel expressed by representatives of various Cox
systems; (iv) the interest expressed by Cox-San Diego and a Cox
programming network in San Diego (4SD--High Definition) in carrying
WealthTV-produced content; and (v) the interest expressed by a CBS
affiliate in Las Vegas in carrying WealthTV as a multicast channel,
which the General Manager of Cox-Las Vegas refused to carry because of
the potential for negative customer reaction if the CBS affiliate were
to drop the WealthTV programming.
39. Third, Cox contends that most of the MVPDs that do not carry
WealthTV are not affiliated with MOJO, thus demonstrating that
decisions to refrain from carrying WealthTV are not based on
affiliation. For example, Cox notes that DBS operators, DIRECTV and
DISH Network, do not carry WealthTV. WealthTV explains, however, that
the decision of DBS operators to refrain from carrying WealthTV is
irrelevant because they do not carry MOJO either. In any event, we
agree with WealthTV that the salient fact is that each owner of the
cable-affiliated MOJO network has refused to carry WealthTV, and a
discrimination claim requires the Commission to assess why these cable
operators have decided to refuse carriage to WealthTV.
7. Conclusion
40. We conclude that WealthTV has established a prima facie showing
that Cox has discriminated against WealthTV in violation of the program
carriage rules.
D. WealthTV v. Comcast
41. After reviewing the pleadings and supporting documentation
filed by the parties, we find that WealthTV has established a prima
facie showing of discrimination under Section 76.1301(c). Comcast is an
MVPD and the largest cable operator in the nation as measured by number
of subscribers. Comcast serves over 24 million basic video subscribers
in 39 states and the District of Columbia. Comcast is affiliated with
MOJO, a video programming vendor. According to Comcast, MOJO is aimed
at 18- to-49-year-old males and its principal programming consists of
sports, movies, and concerts. On May 3, 2007, WealthTV provided Comcast
with a pre-filing notice pursuant to Section 76.1302(b) of the
Commission's rules informing Comcast of its intent to file a program
carriage complaint. As discussed further below, on April 21, 2008,
WealthTV filed its complaint, alleging that Comcast violated Section
76.1301(c) by refusing to carry WealthTV while granting carriage to its
affiliated MOJO service.
1. Background
42. WealthTV states that it has been seeking carriage on Comcast
systems since early to mid-2004. WealthTV discusses its visits with
Comcast representatives in leading markets and claims that systems in
Comcast's Atlantic Division, San Francisco, Washington DC/Virginia,
Chicago, Washington state, and Florida all expressed interest in
carrying WealthTV. According to WealthTV, in the summer of 2004,
Comcast's corporate programming group acknowledged the interest among
Comcast systems in carrying WealthTV but Comcast refused to engage in
meaningful negotiations. WealthTV alleges that Alan Dannenbaum,
Comcast's Corporate Senior Vice President of Programming, stated in the
second half of 2004 that a draft carriage agreement would be
forthcoming but blamed ``scarce resources'' for the failure to produce
a draft. Comcast states that neither its corporate management nor any
individual Comcast system expressed an interest in carrying WealthTV.
43. In August 2006, WealthTV representatives, including WealthTV's
President, Charles Herring, met with Mr. Dannenbaum. According to
WealthTV, Mr. Dannenbaum stated that ``Comcast will not allow another
MTV to be made on Comcast's back without owning it.'' WealthTV states
that it understood this to mean that Comcast would not allow a non-
affiliated network to become successful without owning it. WealthTV
states that this is direct evidence of discrimination in Comcast's
carriage decisions. Comcast provides a declaration from Mr. Dannenbaum
in which he denies making this statement.
44. Comcast states that it made two offers to carry WealthTV in
April 2008, after WealthTV sent its pre-filing notice but prior to the
filing of the Complaint. WealthTV counters that Comcast never made a
firm offer for carriage during these discussions and that none of the
proposals was remotely comparable to the terms and conditions offered
to MOJO.
2. Similarly Situated
45. WealthTV provides similar evidence submitted in connection with
its complaint against TWC purporting to demonstrate that WealthTV and
MOJO are similarly situated. Comcast notes some general dissimilarities
between specific programming on WealthTV and MOJO. Comcast appears to
be arguing that a complainant must demonstrate that its programming is
identical to an affiliated network in order to
[[Page 65318]]
demonstrate discrimination. We find that this is a misreading of the
program carriage statute and our rules.
3. Differential Treatment
46. WealthTV argues that Comcast has treated WealthTV differently
by carrying MOJO on its systems but refusing to carry WealthTV on those
same systems. While Comcast claims that it recently offered WealthTV a
hunting license coupled with a firm commitment for linear carriage of
WealthTV on a system in the Chicago DMA, the salient issue for our
analysis is that Comcast has launched its affiliated MOJO network on a
nationwide basis but it has refused to carry WealthTV on the same
terms.
4. Harm to Ability To Compete
47. As required by the program carriage statute and our rules,
WealthTV has provided evidence that Comcast's refusal to carry WealthTV
restrains its ability to compete fairly. WealthTV explains that
Comcast's decision to carry MOJO while denying carriage to WealthTV
provides MOJO with a first mover advantage with respect to the viewers
and advertisers each network targets. WealthTV also claims that an
independent channel must be available to at least 20 million
subscribers in order to attract national advertisers and to achieve
financial viability. WealthTV states that the inability to obtain
carriage on Comcast systems makes it more difficult for independent
programmers to reach this level of subscribership. WealthTV also
explains that obtaining carriage in major markets where Comcast owns or
operates cable systems, such as Philadelphia, Chicago, San Francisco,
Boston, Washington, and Houston, is essential for attracting
advertisers. According to WealthTV, cable systems and satellite
companies look to Comcast in making programming decisions, thereby
making Comcast's refusal to carry WealthTV particularly harmful. In
addition, Comcast's refusal to carry WealthTV has harmed WealthTV's
ability to bargain with advertisers and other cable systems.
48. In response, Comcast claims that carriage on its competitors,
such as DIRECTV, DISH Network, AT&T, and Verizon, would allow WealthTV
to reach its subscriber goals. We reject this claim because it would
effectively exempt all MVPDs from program carriage obligations based on
the possibility of carriage on other MVPDs. Moreover, the program
carriage provision of the Act prohibits an MVPD from discriminating
against an unaffiliated programmer regardless of the competition the
MVPD faces. Comcast also states that WealthTV could distribute its
programming on alternative distribution platforms, such as VOD or the
Internet. The program carriage statute, however, does not excuse an
MVPD's discriminatory conduct based on the possibility of alternative
distribution platforms.
5. Alleged Business and Editorial Justifications for Comcast's Refusal
To Carry WealthTV
49. Comcast offers a number of alleged business and editorial
justifications for its refusal to carry WealthTV but to carry MOJO.
First, Comcast states that it declined to carry WealthTV on terms
similar to MOJO based on its business and editorial judgment.
Specifically, Comcast states that its decision to carry a channel
depends on capacity constraints; the type and quality of the
programming; the channel's track record of producing programming;
evidence of consumer appeal for the channel; the experience of the
channel's management team; and the terms offered by the channel. Based
on these factors, Comcast contends that it determined that WealthTV
does not warrant extensive carriage. WealthTV argues that it meets
Comcast's carriage criteria, explaining that it is an established
channel with experienced management and proven consumer appeal, as
demonstrated by: (i) Its linear carriage on 75 MVPDs to date; (ii) a
sampling of e-mails from viewers reflecting their support for the
channel; (iii) the interest in the channel expressed by representatives
of various Comcast systems as well as favorable comments about WealthTV
made by Madison Bond, Comcast's Executive Vice President for Content
Acquisition; and (iv) the results of an independent survey which
reports that WealthTV's HD VOD product ranked fourth out of twenty HD
services. WealthTV also notes that it offered very favorable terms for
carriage.
50. Second, Comcast contends that most MVPDs do not carry WealthTV,
including those that have no affiliation with MOJO, again demonstrating
that decisions regarding carriage of WealthTV are not based on
affiliation. For example, Comcast notes that DBS operators, DIRECTV and
DISH Network, do not carry WealthTV. WealthTV explains, however, that
the decision of DBS operators to refrain from carrying WealthTV is
irrelevant because they do not carry MOJO either. Moreover, WealthTV
notes that AT&T, Verizon, and other Comcast competitors carry WealthTV
but not MOJO.
6. Conclusion
51. We conclude that WealthTV has established a prima facie showing
that Comcast has discriminated against WealthTV in violation of the
program carriage rules.
E. Conclusion
52. In the Second Report and Order, the Commission stated that it
would identify specific behavior that constitutes discrimination on a
case-by-case basis ``because the practices at issue will necessarily
involve behavior that must be evaluated within the context of specific
facts pertaining to each negotiation.'' Second Report and Order, 58 FR
60390, November 16, 1993. Any complainant alleging a violation of the
prohibition in Section 616(a)(3) on discrimination must demonstrate
that the alleged discrimination is ``on the basis of affiliation or
nonaffiliation'' of a vendor, and that ``the effect of the conduct that
prompts the complaint is to unreasonably restrain the ability of the
complainant to compete fairly.'' Id.; 47 CFR 76.1302(c)(3). After
reviewing the pleadings and supporting documentation filed by the
parties, we find that WealthTV has established a prima facie case in
the above-referenced cases under Section 76.1301(c). We also find that
the pleadings and supporting documentation present several factual
disputes as to whether TWC, BHN, Cox, and Comcast discriminated against
WealthTV in favor of their affiliated MOJO service. Accordingly, we
direct the ALJ to make and return a Recommended Decision to the
Commission pursuant to the procedures set forth below within 60 days
after release of this Order (i.e., by December 9, 2008).
II. NFL Enterprises v. Comcast
53. After reviewing the pleadings and supporting documentation
filed by the parties, we find that the NFL has established a prima
facie case that Comcast (i) discriminated against the NFL Network in
violation of Section 76.1301(c) of our rules; and (ii) required a
financial interest in the NFL's programming as a condition for carriage
of the NFL Network, in violation of Section 76.1301(a) of the
Commission's rules. The NFL owns the NFL Network, a video programming
vendor as defined in Section 616(b) of the Act and Section 76.1300(e)
of the Commission's rules. See 47 U.S.C. 536(b); 47 CFR 76.1300(e). The
NFL Network was launched in 2003 as a fan development vehicle to offer
football-related programming. In addition to offering eight live NFL
regular season games, the NFL Network
[[Page 65319]]
offers pre-season live and tape-delayed games as well as coverage of
the NFL Scouting Combine, the NFL Draft, team training camps, and other
programming. The NFL states that the NFL Network is an independent
network that is not owned by any cable or satellite operator. The NFL
Network is currently carried by over 240 MVPDs to 36 million
subscribers nationwide. Comcast is the largest MVPD in the nation, with
approximately 24.7 million subscribers. Comcast is affiliated with
Versus (previously named the Outdoor Life Network (``OLN'')), the Golf
Channel, as well as other video programming vendors.
A. Background
54. On April 17, 2008, the NFL provided Comcast with a pre-filing
notice pursuant to Section 76.1302(b) of the Commission's rules
informing Comcast of its intent to file a program carriage complaint.
As discussed further below, on May 6, 2008, the NFL filed its
complaint, alleging that Comcast (i) discriminated against the NFL
Network in favor of its affiliated video programming vendors, including
Versus and the Golf Channel, in violation of Section 76.1301(c) of the
Commission's rules; and (ii) required a financial interest in the NFL's
programming as a condition for carriage of the NFL Network, in
violation of Section 76.1301(a) of the Commission's rules. In its
Complaint, the NFL requests the Commission to (i) Find Comcast in
violation of Sections 76.1301(a) and (c) of the Commission's rules;
(ii) enjoin Comcast from further program carriage discrimination; (iii)
order Comcast to carry the NFL Network on equitable terms that do not
unreasonably restrict its ability to compete fairly, as determined by
the Media Bureau; and (iv) order any other relief that may be
appropriate. In its Reply, the NFL specifies further that the
Commission should require Comcast to carry the NFL Network on the same
tier as its affiliated national sports networks, Versus and the Golf
Channel, beginning with the commencement of the fall 2008 football
season. The NFL also contends that an extensive evidentiary
investigation is not needed and that the Commission should promptly
enter an Order providing its requested relief.
55. According to Comcast, the NFL approached Comcast regarding
carriage of the NFL Network in 2003. Comcast claims that it was not
interested in carrying the NFL Network because consumer interest in a
football-only network without any live NFL games appeared weak; Comcast
had bandwidth constraints; and Comcast was concerned about the soaring
costs of sports programming. Comcast claims that around the time the
NFL was seeking carriage for the NFL Network, it was also seeking to
make available to MVPDs its NFL Sunday Ticket package and a package of
eight live NFL regular season games (the ``Eight-Game Package'').
Comcast states that it was interested in acquiring the rights to
telecast the NFL Sunday Ticket because it had lost subscribers to
DIRECTV which had exclusive rights to NFL Sunday Ticket. Comcast states
that it was also interested in licensing the Eight-Game Package for its
Versus network. According to Comcast, the NFL sought to make carriage
of the NFL Network more attractive by coupling carriage of the NFL
Network on a widely distributed tier with an opportunity for Comcast to
bid on NFL Sunday Ticket and the Eight-Game Package. Comcast was
concerned, however, that it might be forced to carry the NFL Network on
a widely distributed tier even if it did not acquire the licensing
rights to NFL Sunday Ticket and the Eight-Game Package.
56. In August 2004, the NFL and Comcast entered into a Negotiating
Agreement regarding the NFL Sunday Ticket and the Eight-Game Package
and an Affiliation Agreement regarding carriage of the NFL Network. In
the Affiliation Agreement, Comcast agreed to carry the NFL Network on
its digital basic tier (called the ``D2'' tier). The Affiliation
Agreement provided that, with one exception, no Comcast system could
distribute the NFL Network solely in a sports tier. The exception
provided that Comcast would have the right to move the NFL Network from
the digital basic tier to any tier (including a premium sports tier) if
Comcast and the NFL did not reach an agreement by July 31, 2006
concerning carriage of the NFL Sunday Ticket or the Eight-Game Package
(the ``Conditional Tiering Provision''). The NFL alleges that Comcast
``forced'' it to agree to the Conditional Tiering Provision. Comcast
states that this provision was meant to address its concern that it
might be forced to carry the NFL Network on a widely distributed tier
even if it did not acquire the licensing rights to NFL Sunday Ticket or
the Eight-Game Package. Comcast claims that the Conditional Tiering
Provision was a fundamental part of the parties' agreement and that it
would not have agreed to carry the NFL Network without this provision.
Pursuant to this Affiliation Agreement, Comcast began to carry the NFL
Network on its digital basic tier in 2004. According to the NFL, from
2004 until the summer of 2007, approximately 8.6 million Comcast
customers received the NFL Network on the digital basic tier.
57. In November 2004, the NFL renewed its exclusive contract with
DIRECTV for the NFL Sunday Ticket through 2010, but Comcast and the NFL
continued negotiations regarding the Eight-Game Package. During the
negotiations regarding the Eight-Game Package, Comcast claims that it
reminded the NFL on more than one occasion that the Conditional Tiering
Provision would provide Comcast with the right to move the NFL Network
to a sports tier if Comcast did not obtain the rights to the Eight-Game
Package for its Versus network.
58. On January 24, 2006, Comcast's Chief Executive Officer Brian
Roberts met with then-NFL Commissioner Paul Tagliabue and others from
the NFL. The NFL states that Mr. Tagliabue told Mr. Roberts that the
NFL's then-current thinking was that it would not license the Eight-
Game Package to Comcast. According to the NFL, Mr. Roberts ``threatened
that if the NFL did not license the package to Versus, Comcast would
drop the NFL Network from the 'D2' tier and shift it to an undesirable
premium sports tier * * *.'' According to Comcast, Mr. Roberts was
simply reminding the NFL of Comcast's rights under the Conditional
Tiering Provision. Following this meeting, the NFL awarded the Eight-
Game Package to the NFL Network.
59. According to the NFL, on January 27, 2006, Mr. Roberts
``warned'' Mr. Tagliabue that, because of the NFL's failure to license
the Eight-Game Package to Comcast, the NFL's ``relationships with the
cable industry are going to get very interesting.'' Mr. Tagliabue
states that he believes that this statement foreshadowed Comcast's
retaliation against the NFL for refusing to license the Eight-Game
Package to Comcast. Mr. Roberts states that he has no recollection of
making this statement. Rather, Mr. Roberts states that he expressed his
disappointment about the NFL's decision and said that he foresaw that
the NFL would continue to face difficulties persuading cable operators
to provide the NFL Network with broad distribution given that the
Eight-Game Package would add significantly to the price of the network
but would not improve the overall appeal of the content.
60. Pursuant to the Affiliation Agreement, Comcast would have the
right to show the Eight-Game Package on the NFL Network on its cable
systems only if Comcast agreed to an increase in the license fee for
the NFL
[[Page 65320]]
Network of up to $0.55 per subscriber per month. If Comcast did not
agree to pay this increase in the license fee, then the NFL Network
would show alternate programming on Comcast's systems at the times
these games would be shown. On July 27, 2006, Comcast agreed to the fee
increase. Comcast claims that it agreed to this fee increase only after
confirming with the NFL that the Conditional Tiering Provision was
mutually understood to remain in effect.
61. On September 24, 2006, Comcast announced its plans to launch
the NFL Network on a premium sports tier on systems it had acquired
from Time Warner. In October 2006, the NFL sued Comcast in New York
state court claiming that Comcast did not have the right under the
parties' agreements to carry the NFL Network on a premium sports tier.
In the NFL's view, the Conditional Tiering Provision in the Affiliation
Agreement was not triggered because Comcast and the NFL reached an
agreement concerning carriage of the Eight-Game Package when Comcast
agreed to pay an additional $0.55 per subscriber per month to deliver
the NFL Network's broadcast of the Eight-Game Package via Comcast's
cable systems. In Comcast's view, Comcast and the NFL did not reach an
agreement concerning carriage of the Eight-Game Package because the
games were awarded to the NFL Network and not to Comcast's affiliated
Versus network. In May 2007, the trial court granted Comcast's motion
for summary judgment. Following release of the trial court's order,
Comcast formally notified the NFL of its intent to shift NFL Network to
a sports tier in most of its systems. The NFL states that Comcast's
action to shift the NFL Network from a digital basic tier to a premium
sports tier reduced the number of Comcast subscribers that received the
NFL Network from 8.6 million to 1.4 million. On February 26, 2008, a
New York appellate court reversed the lower court's ruling and found
that the parties' agreement was sufficiently ambiguous to create a
triable issue of fact. In May 2008, the parties agreed to pursue non-
binding mediation at the request of the court.
B. Procedural Issues
62. Comcast argues that the NFL complaint should be dismissed on
any of the following procedural grounds. For the reasons discussed
below, we decline to dismiss the complaint on any of these grounds.
1. Program Carriage Statute of Limitations
63. Comcast argues that the NFL complaint is barred by the program
carriage statute of limitations. Comcast contends that, of the events
that trigger the running of the program carriage statute of
limitations, only the date on which the parties entered into a carriage
agreement for the NFL Network is applicable in this case. Comcast
states that the Affiliation Agreement was executed on August 11, 2004,
thereby causing the statute of limitations to expire on August 11,
2005. Comcast asserts that its exercise of its contractual right to
retier the NFL Network cannot be the triggering event because that is a
decision made under the Affiliation Agreement and any disagreement
regarding the terms of the agreement must be addressed in state court.
In response, the NFL states that its complaint does not allege that the
Affiliation Agreement violates the program carriage rules. Rather, the
NFL claims that the issue is the legality of Comcast's act of retiering
the NFL Network to a premium sports tier between June 1, 2007 and July
15, 2007. The NFL states that it filed its complaint within days after
its pre-filing notice and less than a year after Comcast's action to
retier the NFL Network, in compliance with the statute of limitations
in Section 76.1302(f)(3). Comcast argues that the statute of
limitations period cannot run from the date of the NFL Network's pre-
filing notice. Comcast alleges that such an interpretation would allow
a programmer to bring a program carriage complaint simply by sending a
``trigger'' letter at any time. The NFL contends, however, that the
statute of limitations cannot be interpreted to run only from the date
an existing agreement was executed because that would preclude a
programmer from seeking relief regarding discriminatory acts that
occurred greater than one year after the agreement was executed.
64. We conclude that the NFL filed its program carriage complaint
in compliance with the program carriage statute of limitations. The
alleged act of discrimination about which the NFL complains is
Comcast's act of moving the NFL Network from a digital basic tier to a
premium sports tier. This act occurred no earlier than June 2007. The
NFL filed its program carriage complaint within one year of this act
and within one year of its pre-filing notice. Accordingly, the NFL
filed its complaint in compliance with the statute of limitations. We
reject Comcast's argument that the one-year statute of limitations is
triggered by the execution of the agreement because that act did not
give rise to the discrimination claim and treating that act as the
triggering event here would render Section 76.1302(f)(3) of our rules
superfluous and frustrate enforcement of the statute and rules.
2. Dismissal Pending Litigation
65. Comcast argues that the NFL complaint should be dismissed
pending the outcome of the state court litigation. Comcast states that
the NFL and Comcast are involved in contract litigation involving the
same set of operative facts that underlie the complaint, and the
resolution of which is inextricably intertwined with the resolution of
the complaint. Comcast contends that, if the court rules that the
Conditional Tiering Provision was triggered, then it would be difficult
if not impossible for the Commission to decide that Comcast violated
the program carriage rules by exercising a right granted to it by the
NFL. According to the NFL, however, the issue of the interpretation of
the contract is irrelevant to the program carriage dispute. In the
NFL's view, even if the court finds that the Conditional Tiering
Provision was triggered and Comcast had the ``right'' to retier the NFL
Network, Comcast could not exercise that right in a discriminatory
manner that violates the program carriage rules. According to the NFL,
Section 616 protects independent programmers and the public regardless
of the terms of a private agreement. Comcast asserts that dismissal of
the complaint pending litigation is consistent with Commission
precedent. The NFL disputes this and notes that the Commission
addressed a program carriage complaint filed by TCR Sports Broadcasting
Holding, L.L.P. against Comcast despite the pendency of related
litigation in state court. Comcast also claims that it would be a waste
of resources for the Commission to consider the complaint because the
parties have already decided to mediate the issues in dispute.
According to Comcast, the NFL agreed to a broad mediation that would
encompass all issues between the parties, including those in the
program carriage complaint proceeding. According to the NFL, the state
court litigation does not address the issues of program carriage
discrimination addressed in the program carriage complaint proceeding.
The NFL also states that, even if the court were to address program
carriage discrimination, it would not be ripe for resolution until
after the next football season and likely the one that follows (2009-
2010). The NFL also notes that the parties have not agreed to seek a
stay of the program carriage proceeding pending the outcome of the
mediation.
[[Page 65321]]
Thus, the NFL argues that the mediation should not affect the
Commission's consideration of the program carriage issues in this
proceeding.
66. We decline to dismiss the NFL complaint pending the outcome of
the state court litigation. The act of alleged discrimination about
which the NFL complains is Comcast's act of moving the NFL Network from
a digital basic tier to a premium sports tier. Whether or not Comcast
had the right to retier the NFL Network pursuant to a private agreement
is not relevant to the issue of whether doing so violated Section 616
of the Act and the program carriage rules. Parties to a contract cannot
insulate themselves from enforcement of the Act or our rules by
agreeing to acts that violate the Act or rules. Because the state court
litigation will not resolve the NFL's program carriage claim, we
conclude that we can proceed with the program carriage complaint
despite the pendency of the litigation. Moreover, the parties have not
agreed to stay this proceeding pending the outcome of mediation, and we
find no cause to do so on our own motion.
3. Specificity of Requested Relief
67. Comcast argues that the NFL complaint should be dismissed
because the complaint failed to state ``with specificity'' the relief
requested. 47 CFR 76.6(a)(1). Comcast states that the NFL's requested
relief does not include specific proposals regarding price, tier
placement, and other carriage terms. The NFL argues that its complaint
was sufficiently specific in seeking carriage by Comcast on non-
discriminatory terms, i.e., on the same terms and conditions as
Comcast's affiliated national sports networks, Versus and the Golf
Channel, including carriage on the expanded basic tier. We conclude
that the NFL's requested relief was sufficiently specific under our
rules and did not deprive Comcast of an adequate opportunity to respond
in its Answer.
4. Signature and Verification Requirements
68. Comcast states that the NFL complaint does not comply with the
signature and verification requirements applicable to program carriage
complaints. The NFL does not dispute these claims, but argues that
other program carriage complaints that did not comply with the
signature requirement have been accepted by the Commission and that its
complaint included a Declaration of an NFL executive certifying the
accuracy of the factual statements in the complaint. We agree with
Comcast that these instances of non-compliance are of ``limited
consequence.'' Accordingly, on our own motion, we waive these
requirements in the interests of resolving the important issues raised
in the complaint in an expeditious manner and due to the presence of
the Declaration of an NFL executive referenced above.
C. Discrimination Claim
1. Similarly Situated
69. The NFL alleges that Comcast has discriminated against the NFL
Network in favor of its affiliated video programming vendors, including
Versus and the Golf Channel, in violation of Section 76.1301(c) of the
Commission's rules. The NFL argues that the NFL Network is a national
sports network and therefore is similarly situated to the national
sports networks that Comcast owns (Versus and the Golf Channel). The
NFL also argues that the NFL Network, Versus, and the Golf Channel
compete for programming, advertising, or target viewers. Comcast claims
that the NFL Network is not a direct competitor to Versus or the Golf
Channel in terms of programming, advertising, or target viewers.
Comcast appears to be arguing that a complainant must demonstrate that
its programming is identical to an affiliated network in order to
demonstrate discrimination. We find that this is a misreading of the
program carriage statute and our rules.
2. Differential Treatment
70. The NFL alleges that Comcast has discriminated against the NFL
Network in violation of Section 76.1301(c) by carrying the NFL Network
on a premium sports tier (which costs subscribers an additional $5-7
per month and is subscribed to by approximately 2 million Comcast
subscribers) while Comcast carries the national sports networks that it
owns (Versus and Golf Channel) on an expanded basic tier which has
approximately 24 million subscribers. Comcast admits that it carries
the NFL Network on a premium sports tier but carries Versus and the
Golf Channel on its expanded basic tier.
3. Harm to Ability To Compete
71. As required by the program carriage statute and our rules, the
NFL Network has provided evidence purporting to demonstrate that
Comcast's refusal to carry the NFL Network on an expanded basic tier
restrains its ability to compete fairly. The NFL explains how Comcast's
decision to exclude the NFL Network from a basic tier has prevented the
network from achieving economies of scale and has blocked the network
from the most efficient distribution channel for the provision of
national sports programming and the sale of advertising. The NFL
explains that carriage of the NFL Network on a widely distributed tier
is better for the network, viewers, and advertisers than carriage on a
premium tier and that carriage on a premium tier unreasonably impedes
the NFL Network's ability to compete fairly. With respect to the
benefits for the network, the NFL discusses how basic tier carriage
results in more subscribers which results in greater advertising
revenues, greater license revenues, and a greater ability to compete
for national advertisers and for content, and relieves the network from
having to incur promotional expenses to convince consumers to subscribe
to the premium tier. Moreover, the NFL explains that basic tier
carriage maximizes a network's subscribership and, thus, advertising
revenues, which allows for reduced license fees. The NFL also submits
that carriage of a network on a basic tier benefits consumers by
allowing the network to discipline the license fees of rival networks.
In addition, the NFL claims that basic tier carriage benefits
advertisers by enabling the NFL Network to discipline advertising rates
of rival networks. The NFL explains that Comcast's affiliated national
sports networks, Versus and the Golf Channel, benefit from Comcast's
decision to carry the NFL Network on a premium tier. Specifically,
placing the NFL Network in a premium sports tier harms its ability to
compete with Comcast's affiliated national sports networks by (i)
increasing the NFL Network's promotional costs and by reducing its
advertising revenues; and (ii) providing Comcast's affiliated national
sports networks with a competitive advantage in attracting advertisers
and obtaining new content because these networks have greater
distribution than their rival the NFL Network. The NFL also notes that
Comcast's behavior to favor its affiliated national sports networks is
similar to behavior that has been found to be a violation of the
program carriage rules in another case.
72. Comcast argues that the NFL Network can achieve a critical mass
of subscribers without carriage on Comcast. Comcast claims that there
are multiple competing MVPDs that offer the NFL Network in all areas
served by Comcast, such as DIRECTV, DISH Network, RCN, Verizon, and
AT&T. According to Comcast, if its subscribers do not like Comcast's
decision to place the NFL Network on a premium sports tier, they can
switch to an MVPD that
[[Page 65322]]
provides the NFL Network with wider carriage. Comcast also argues that
the fact that it already makes the NFL Network available to 24 million
households undermines the NFL's claim that Comcast is unreasonably
restraining the ability of the NFL Network to compete fairly.
4. Alleged Business and Editorial Justifications for Comcast's Refusal
To Carry NFL Network on an Expanded Basic Tier
73. Comcast offers a number of alleged business and editorial
justifications for its decision to place the NFL Network on a premium
sports tier while placing Versus and the Golf Channel on an expanded
basic tier. First, Comcast notes that the license fee for Versus is
approximately $0.25 per subscriber per month and the license fee for
the Golf Channel is less than $0.35 per subscriber per month, whereas
the license fee for the NFL Network with the Eight-Game Package is
$0.70 per subscriber per month. The NFL contends that Comcast has
failed to consider the record evidence that the NFL Network receives
substantially higher ratings than Versus and the Golf Channel, despite
the fact that the NFL Network is carried on a premium tier. The NFL
notes that the relatively lower license fees for Versus and the Golf
Channel reflect their lower popularity. Moreover, NFL provides evidence
that the NFL Network is less expensive than some other sports networks,
such as ESPN and some RSNs. While Comcast argues that it acted to
protect its customers by placing expensive programming such as the NFL
Network on a premium sports tier, the NFL alleges that Comcast's
decision to move the NFL Network to a premium sports tier did not
result in a reduction in the monthly fees for its digital basic
service, thereby undermining its claim that its decision to retier the
NFL Network was intended to protect consumers.
74. Second, Comcast claims that Versus and the Golf Channel offer
far more live and same-day event programming than the NFL Network. The
NFL responds that the record evidence demonstrates that the NFL Network
receives substantially higher ratings than Versus and the Golf Channel,
despite the amount of live sports programming on Versus and the Golf
Channel.
75. Third, Comcast argues that different carriage histories justify
wide distribution for Versus and the Golf Channel and more limited
distribution for the NFL Network. Specifically, Comcast notes that
Versus and the Golf Channel launched in 1995 when there were greater
opportunities for launch of a network, even on expanded basic. The NFL
argues, however, that basing carriage decisions on carriage histories
unfairly favors affiliated networks that have enjoyed a history of
preferential treatment from vertically integrated MVPDs and does not
serve to distinguish discriminatory from nondiscriminatory treatment,
as the Act and our rules require.
76. Fourth, Comcast contends that cable subscribers already have
access to a substantial quantity of live NFL programming on broadcast
television and ESPN. Moreover, Comcast notes that the out-of-market
games offered by the NFL Network are available on local broadcast
channels in the home markets of the participating teams. The NFL
submits that the consistently high ratings for the NFL Network refute
Comcast's claim that there is a lack of demand for football
programming. The NFL also notes that Comcast's previous decision to
place the NFL Network on its digital basic tier demonstrates Comcast's
view that the programming on the NFL Network has broad appeal.
77. Fifth, Comcast notes that some MVPDs, such as Charter, Time
Warner, Cablevision, Bright House, Suddenlink, and Mediacom, do not
carry the NFL Network at all, while others, such as Cox, carry the NFL
Network on a sports tier. According to Comcast, the fact that other
MVPDs that are not vertically integrated with national sports networks
have decided to carry the NFL Network on a premium sports tier (or not
at all) demonstrates that Comcast's decision to place the NFL Network
on a premium sports tier was based on legitimate business reasons. The
NFL contends that this claim is rebutted by the record evidence that
demonstrates substantial carriage of NFL Network by various MVPDs on
widely distributed tiers. The NFL notes that all of Comcast's major
competitors--DIRECTV, DISH Network, Verizon, and AT&T--carry the NFL
Network on a more widely distributed tier than the digital basic tier
that Comcast formerly carried the NFL Network on before it was shifted
to a premium sports tier. Moreover, the NFL states that most of the
approximately 240 MVPDs that carry the NFL Network carry it on widely
distributed tiers that are available in at least 70 percent of the
households served by these MVPDs. In addition, the NFL claims that
Comcast is the only MVPD that carries the NFL Network on a tier taken
by less than ten percent of subscribers.
78. Finally, Comcast argues that Versus and the Golf Channel are
carried on widely distributed tiers of virtually every major MVPD, even
though these MVPDs have no ownership interest in either network. The
NFL argues that the conduct of other cable operators is irrelevant to
the issue of whether Comcast carries its affiliated programmers on more
favorable terms than the NFL Network, an unaffiliated programmer.
5. Conclusion
79. In the Second Report and Order, the Commission stated that it
would identify specific behavior that constitutes discrimination on a
case-by-case basis ``because the practices at issue will necessarily
involve behavior that must be evaluated within the context of specific
facts pertaining to each negotiation.'' Second Report and Order, 58 FR
60390, November 16, 1993. Any complainant alleging a violation of the
prohibition in Section 616(a)(3) on discrimination must demonstrate
that the alleged discrimination is ``on the basis of affiliation or
nonaffiliation'' of a vendor, and that ``the effect of the conduct that
prompts the complaint is to unreasonably restrain the ability of the
complainant to compete fairly.'' Id.; 47 CFR 76.1302(c)(3). After
reviewing the pleadings and supporting documentation filed by the
parties, we find that the NFL has established a prima facie case in the
above-referenced case under Section 76.1301(c). We also find that the
pleadings and supporting documentation present several factual disputes
as to whether Comcast discriminated against the NFL in favor of its
affiliated services. Accordingly, we direct the ALJ to make and return
a Recommended Decision to the Commission pursuant to the procedures set
forth below within 60 days after release of this Order (i.e., by
December 9, 2008).
D. Financial Interest Claim
80. The NFL claims that Comcast retaliated against the NFL by
dropping the NFL Network from the digital basic tier to a premium
sports tier after the NFL refused to grant Comcast rights to the Eight-
Game Package for Comcast's Versus network. The NFL alleges that this
amounts to a violation of Section 76.1301(a) because Comcast has
required a financial interest in the NFL's programming as a condition
for program carriage. The NFL argues that Comcast's behavior here is
similar to behavior that has been found to present a prima facie case
of a violation of the program carriage rules in another proceeding.
81. Comcast states that it never required or even requested an
equity interest in the NFL Network. Comcast states that Section
76.1301(a) does not prohibit an MVPD from seeking
[[Page 65323]]
licensing rights in programming as a condition for carriage. Rather,
Comcast states that this rule only prohibits an MVPD from requiring a
financial interest in a ``program service'' as a condition for
carriage. According to Comcast, the NFL incorrectly conflates Comcast's
interest in acquiring the licensing rights to the Eight-Game Package
with a demand for equity in the NFL Network. Comcast notes that it has
no financial interest in the NFL Network or the NFL and yet it still
carries the NFL Network. Accordingly, Comcast argues that it has not
conditioned carriage of the NFL Network on obtaining an equity interest
in the NFL Network.
82. In response, the NFL argues that the statute precludes an MVPD
from requiring any ``financial interest'' in a program service, not
merely an ``equity interest,'' and thus includes an MVPD's demand that
a programmer provide licensing rights, equity interests, or other
financial interests in a program service. The NFL submits that narrowly
construing the term ``financial interest'' to pertain only to demands
for an equity interest would fail to curb many anticompetitive abuses
of vertically integrated MVPDs during carriage negotiations. Moreover,
the NFL notes that Section 76.1301(a) prohibits an MVPD from requiring
a financial interest in ``any program service,'' not merely the program
service for which carriage is sought and not only in a ``video
programming vendor.''
83. In the Second Report and Order, the Commission emphasized that
the statute ``does not explicitly prohibit multichannel distributors
from acquiring a financial interest or exclusive rights that are
otherwise permissible,'' and thus, that ``multichannel distributors
[may] negotiate for, but not insist upon such benefits in exchange for
carriage on their systems.'' Second Report and Order, 58 FR 60390,
November 16, 1993. The Commission stated, however, that ``ultimatums,
intimidation, conduct that amounts to exertion of pressure beyond good
faith negotiations, or behavior that is tantamount to an unreasonable
refusal to deal with a vendor who refuses to grant financial interests
or exclusivity rights for carriage, should be considered examples of
behavior that violates the prohibitions set forth in Section 616.'' Id.
We find that the NFL has presented sufficient evidence to make a prima
facie showing that Comcast indirectly and improperly demanded a
financial interest in the NFL's programming in exchange for carriage.
We further find that the pleadings and documentation present several
factual disputes as to whether Comcast's retiering of the NFL Network
is the result of Comcast's failure to obtain a financial interest in
the NFL's programming. Accordingly, we direct an Administrative Law
Judge to hold a hearing, issue a recommended decision on the facts
underlying the financial interest claim and a recommended remedy, if
necessary, and then return the matter to the Commission within 60 days.
III. MASN v. Comcast
84. After reviewing the pleadings and supporting documentation
filed by the parties, we find that MASN has established a prima facie
case under Section 76.1301(c). MASN is an RSN that owns the rights to
produce and exhibit the games of the Baltimore Orioles and Washington
Nationals, among other sporting events. MASN is a video programming
vendor as defined in Section 616(b) of the Act and Section 76.1300(e)
of the Commission's rules. Pursuant to the by-laws of Major League
Baseball (``MLB''), each MLB team is assigned television rights to
certain geographic regions based on its determination of which teams'
baseball fans in certain areas would or would not support. The home
territory for MASN consists of the entire states of Virginia, Maryland,
Delaware, and Washington, DC, and certain parts of southern
Pennsylvania, eastern West Virginia, and a substantial part of North
Carolina (the ``MASN Territory''). Comcast is the nation's largest MVPD
and holds an attributable ownership interest in Comcast SportsNet
Philadelphia (``CSN-P'') and Comcast SportsNet Mid-Atlantic (``CSN-
MA''), among other networks.
85. On March 7, 2008, MASN provided Comcast with its pre-filing
notice. MASN filed its complaint on July 1, 2008, alleging that Comcast
discriminated against MASN in violation of the program carriage rules.
MASN asks the Commission to (i) Declare that Comcast's conduct is a
violation of the program carriage obligations under the Act and the
Commission's rules; (ii) order mandatory carriage of MASN on the
Comcast systems in the MASN Territory that do not carry MASN; (iii) if
necessary, require Comcast to delete its affiliated programming to
clear capacity for MASN; (iv) require Comcast to provide a timetable
for the upgrade of the former-Adelphia systems; (v) grant MASN
substantial damages that have resulted from Comcast's misconduct; and
(vi) grant MASN such other and further relief as the Commission deems
just and proper. Comcast urges the Commission to find MASN in violation
of the rules prohibiting frivolous pleadings and to impose appropriate
penalties, including monetary forfeitures.
A. Background
86. MASN claims that since 2005 it has sought carriage on all of
Comcast's cable systems located within the MASN Territory, including in
the Harrisburg-Lancaster-Lebanon-York DMA (``Harrisburg DMA''), as well
as the Roanoke-Lynchburg DMA and the Tri-Cities DMA (the later two DMAs
are referred to as the ``southwestern Virginia DMAs''). Comcast denies
that MASN ever specifically sought carriage in Harrisburg and
southwestern Virginia during negotiations in 2005 or 2006. In fact,
Comcast claims that MASN's primary focus was to obtain carriage in its
core Washington, DC and Baltimore markets before the end of the 2006
baseball season, and at no point did MASN express any specific interest
in Comcast's Harrisburg or southwestern Virginia systems.
87. The parties failed to reach a carriage agreement. In June 2005,
MASN filed a program carriage complaint alleging discrimination and
that Comcast illegally demanded a financial interest in MASN as a
condition of carriage. MASN requested that the Commission order Comcast
to provide carriage of MASN on all Comcast systems in the MASN
Territory. On July 21, 2006, while MASN's program carriage complaint
against Comcast was pending, the Commission adopted the Adelphia Order,
which provided unaffiliated RSNs with the opportunity to pursue
commercial arbitration of program carriage disputes with Comcast. On
July 31, 2006, the Commission found that MASN had established a prima
facie case of discrimination in its pending program carriage complaint
and referred the matter to an ALJ. The Commission stayed the decision
to give MASN an opportunity to decide whether to proceed with the
complaint or with the expedited arbitration provided in the Adelphia
Order. MASN claims that pursuant to the Adelphia Order conditions it
had only five days--until August 4, 2006--to decide whether to file an
arbitration demand with the American Arbitration Association (``AAA'')
or to proceed with the carriage complaint before an ALJ. Comcast
disputes this claim, arguing that MASN could have elected to file a
simple notice with the AAA (or the Commission) and ask that the
proceeding be held in abeyance while the parties continued to
negotiate. With the deadline for filing for arbitration
[[Page 65324]]
approaching, the parties entered into further negotiations.
88. MASN claims that on August 2, 2006, it e-mailed a revised
version of the Term Sheet the parties had been negotiating to Comcast.
As with the previous versions, MASN claims that the Term Sheet
contained an intentionally blank list of the Comcast systems on which
Comcast would carry MASN (the ``List of Systems''). MASN claims that it
understood and intended that Comcast would fill in the List of Systems
with all of Comcast's cable systems within the MASN Territory. MASN
claims that on August 2, 2006, Comcast for the first time expressed
concern that it could not immediately commit to carry MASN on systems
serving a number of subscribers in Roanoke/Lynchburg and other Virginia
areas that were served by systems that Comcast acquired from Adelphia
because these systems lacked sufficient capacity.
89. MASN states that on the afternoon of August 4, 2006--just three
hours before the arbitration deadline--Comcast transmitted to MASN via
e-mail a revised version of the Term Sheet the parties had been
negotiating. MASN states that Comcast's e-mail provided Comcast's List
of Systems for the first time. MASN explains that Comcast gave no
indication that the list excluded any of its systems except for the
former-Adelphia systems in Roanoke/Lynchburg and other Virginia areas.
Comcast explains that its revised draft of the Term Sheet specifically
deleted the language providing for carriage of MASN on ``all Comcast
systems'' and inserted language limiting Comcast's carriage obligation
to the specific systems listed in the List of Systems. Comcast claims
that MASN never asked whether any Comcast systems were excluded from
the List of Systems or otherwise raised any objections to the List of
Systems. MASN states that Comcast's e-mail accompanying the Term Sheet
stated that the revised version ``reflects the deal we've been
discussing over the past two days as well as some other clean-up
changes.'' MASN claims that this representation is clear that the Term
Sheet would memorialize and not alter the parties' discussions, which
concerned carriage of MASN to all Comcast subscribers within the MASN
Territory with the sole exception of the former-Adelphia subscribers
previously discussed. Comcast disagrees, claiming that the deal Comcast
and MASN had been discussing was for carriage on most, but not all, of
Comcast's systems. Comcast claims that it never committed to carry MASN
on all of its systems.
90. MASN claims that it attempted to review the List of Systems,
but it lacked any independent means of verifying the contents,
particularly with only three hours before the arbitration deadline. In
response, Comcast states that MASN never claimed during the
negotiations that it did not have adequate time to review the List of
Systems. In addition, Comcast states that, because the List of Systems
is less than two pages long with only 60 systems listed, it should not
have taken hours to review. Comcast also claims that there were
multiple public sources available to MASN that would have allowed it to
easily determine which Comcast systems were and were not included in
the List of Systems. MASN claims that none of these public sources
would have allowed MASN to verify the contents of the List of Systems.
91. MASN and Comcast signed the Term Sheet on August 4, 2006, less
than one-half hour before the deadline to file for arbitration. The
Term Sheet included a Release which required MASN to withdraw its
pending program carriage complaint against Comcast. MASN filed a Motion
to withdraw its complaint on August 9, 2006. On August 15, 2006, an ALJ
released a decision granting the Motion and terminating the proceeding.
92. In January 2007, four months after Comcast's first launch in
September 2006 of MASN on some of its systems, MASN learned that
Comcast did not intend to launch MASN on certain systems around
Harrisburg. MASN then initiated an effort to document the Comcast
systems where Comcast did not launch MASN. MASN determined that it had
not been launched on Comcast systems in the Harrisburg, Roanoke/
Lynchburg, and Tri-Cities DMAs, and in other small systems in Virginia
and Pennsylvania as well as in other areas (collectively, the
``Unlaunched Systems''). Some of these systems are not former-Adelphia
systems, which MASN claims Comcast never raised as an issue during
negotiations. Some of these systems are former-Adelphia systems, but
MASN argues that Comcast has provided no indication as to when these
systems will be upgraded. Moreover, some former-Adelphia systems have
been upgraded but are still not carrying MASN.
93. Thus, the Unlaunched Systems on which MASN is not being carried
fall into two relevant categories: (i) Unlaunched Comcast systems in
the MASN Territory that Comcast did not acquire from Adelphia (the
``Unlaunched Non-Former-Adelphia Systems''); and (ii) unlaunched
Comcast systems in the MASN Territory that Comcast acquired from
Adelphia (the ``Unlaunched Former-Adelphia Systems'').
94. For approximately a year, the parties engaged in negotiations
for carriage of MASN on the Unlaunched Systems. These negotiations have
not resulted in an agreement.
B. Procedural Issues
95. Comcast argues that the MASN complaint should be dismissed on
the following procedural grounds. For the reasons discussed below, we
decline to dismiss the complaint on any of these grounds.
1. Program Carriage Statute of Limitations
96. Comcast argues that the MASN Complaint is barred by the program
carriage statute of limitations. Comcast contends that, of the three
events that trigger the running of the program carriage statute of
limitations, only the first event--the date on which the parties
entered into the Term Sheet--is applicable in this case. Comcast notes
that the Term Sheet was executed on August 4, 2006, and thus argues
that the statute of limitations expired one year later--on August 4,
2007. Comcast points out that the Complaint was filed on July 1, 2008,
almost 11 months after that date. MASN disagrees. MASN notes that the
Term Sheet commits future carriage decisions to Comcast's
``discretion,'' but any such discretion is constrained by the non-
discrimination obligations of the Act and the Commission's rules. MASN
states that its Complaint is based on Comcast's discriminatory refusal
to carry MASN on the Unlaunched Systems since 2007.
97. Comcast argues that MASN's claim regarding post-Term Sheet
conduct is a new claim which MASN raised for the first time in its
Reply. MASN disagrees, explaining that its Complaint was clear that its
legal claims focused on Comcast's post-Term Sheet conduct. Based on our
examination of the pleadings, we agree with MASN that its claim
regarding post-Term Sheet conduct was not raised for the first time in
its Reply. MASN explains that from the time it discovered that Comcast
would not carry MASN on the Unlaunched Systems until the filing of its
Complaint in July 2008, MASN attempted to reach a carriage agreement
with Comcast. Because those negotiations had appeared to reach an
impasse in March 2008, MASN sent a notice letter to Comcast on March 7,
2008. MASN filed its Complaint on July 1, 2008, well within one year of
notifying Comcast, as required by Section 76.1302(f)(3).
[[Page 65325]]
98. In any event, Comcast argues that there can be no ``refusal to
negotiate'' or ``refusal to carry'' with respect to any Comcast system
in the MASN Territory because a Term Sheet and Release were already
executed between the parties in August 2006. MASN responds that this
line of argument is a contract-based defense to MASN's carriage claims
that is legally and factually unfounded. Comcast also claims that there
is no ``refusal to carry'' because Comcast carries MASN in the vast
majority of Comcast systems in the MASN Territory. MASN responds that
there is no legal authority to support Comcast's view that carriage of
MASN on some Comcast systems extinguishes MASN's legal right to enforce
its program carriage rights with respect to other Comcast systems.
99. We conclude that MASN filed its program carriage complaint in
compliance with the program carriage statute of limitations. MASN's
claims regarding program carriage discrimination apply to Comcast's
refusal to exercise its discretion to carry MASN on the Unlaunched
Systems after the Term Sheet was signed. As MASN notes, the Term Sheet
committed Comcast's future carriage decisions, including carriage on
systems not included in the List of Systems, to Comcast's
``discretion.'' The Term Sheet, however, does not indicate that MASN
waived its statutory program carriage rights with respect to Comcast's
exercise of such discretion. Accordingly, MASN's claims based on
Comcast's exercise of its discretion pursuant to the Term Sheet are not
subject to the one-year limitations period in Section 76.1302(f)(1).
MASN explains that its negotiations with Comcast for carriage of MASN
on the Unlaunched Systems appeared to reach an impasse in March 2008.
MASN filed its program carriage complaint within one year of this date
and within one year of its pre-filing notice. Accordingly, MASN filed
its complaint in compliance with the limitations period in Section
76.1302(f)(3). The EchoStar case cited by Comcast is inapposite.
EchoStar Communications Corp. v. Speedvision Network, L.L.C. and
Outdoor Life Network, L.L.C., Memorandum Opinion & Order, 14 FCC Rcd
9327 (CSB, 1999), aff'd, EchoStar Communications Corp. v. Speedvision
Network, L.L.C. and Outdoor Life Network, L.L.C., Memorandum Opinion &
Order, 16 FCC Rcd 4949 (2001). In that decision, the Commission did not
hold that a refusal to sell claim is barred when the parties reached a
carriage agreement over one year earlier.
2. Res Judicata
100. Comcast claims that MASN's complaint is barred by the doctrine
of res judicata. As required by the Release, MASN voluntarily sought
and received from the Commission dismissal of its 2005 Complaint.
Comcast asserts that voluntary dismissal with prejudice of a complaint
constitutes a final judgment on the merits as to all claims encompassed
therein. MASN disagrees, arguing that res judicata only applies where
the prior and subsequent actions share a ``common nucleus of operative
facts.'' MASN's past complaint against Comcast concerned Comcast's
discriminatory refusal to carry MASN in response to its carriage
requests beginning in 2005. MASN claims that the current action,
however, is forward-looking and concerns Comcast's discriminatory
refusal to carry MASN after the August 2006 date of the Release.
101. We conclude that the MASN complaint is not barred by res
judicata. MASN's claims regarding program carriage discrimination apply
to Comcast's refusal to exercise its discretion to carry MASN on the
Unlaunched Systems after the parties settled their previous disputes
and signed the Term Sheet. This presents a different set of facts and
circumstances than those presented in the 2005 Complaint.
C. Similarly Situated
102. MASN claims that it is similarly situated to CSN-MA in the
southwestern Virginia DMAs and to CSN-P in the Harrisburg DMA because
the networks are all RSNs and they compete head-to-head in the same
geographic areas. MASN explains that it is an RSN that provides live
sports programming of major professional sports teams (the Orioles and
Nationals). Similarly, Comcast's affiliated RSNs carry major
professional sports programming throughout Comcast's footprint
(including the Washington Wizards and Capitals (in the case of CSN-MA)
and the Philadelphia Phillies and Flyers (in the case of CSN-P)).
Comcast has not attempted to demonstrate that MASN, CSN-MA, and CSN-P
are not similarly situated.
D. Differential Treatment
103. MASN explains that Comcast treats CSN-MA and CSN-P differently
than MASN: On the majority of the Unlaunched Systems, Comcast carries
CSN-P and/or CSN-MA, but Comcast has refused to carry MASN on those
same systems.
E. Harm to Ability To Compete
104. As required by the program carriage statute and rules, MASN
has provided evidence that Comcast's refusal to carry MASN on the
Unlaunched Systems restrains its ability to compete fairly by (i)
Preventing MASN from achieving maximum subscribership; (ii) restraining
MASN's ability to compete for advertising revenues; (iii) restraining
MASN's ability to compete for sports programming rights; and (iv)
increasing MASN's costs. MASN has put forth evidence demonstrating that
as an RSN it needs access to the maximum number of subscribers within
its geographic footprints in order to compete optimally for advertisers
and sports programming rights. In response, Comcast explains that MASN
is carried very broadly in its territory, including by Comcast,
DIRECTV, DISH Network, Cox, Verizon, RCN, and many others. Moreover,
Comcast explains that MASN reaches over 5 million MVPD subscribers,
making it one of the largest RSNs in the country. Comcast notes that it
is carrying MASN to a number of subscribers and there is no evidence
that its refusal to carry MASN in the ``outer reaches'' of Harrisburg
and southwestern Virginia has in any way harmed MASN or affected its
ability to compete.
F. Alleged Contract-Based, Business and Editorial Justifications for
Comcast's Refusal to Carry MASN on the Unlaunched Systems
105. Comcast offers a number of contract-based and alleged business
and editorial justifications for its decision to refrain from carrying
MASN on the Unlaunched Systems.
1. Contract-Based Justifications
a. Term Sheet
(i) Unlaunched Non-Former-Adelphia Systems
106. Comcast argues that the unambiguous terms of the Term Sheet do
not obligate it to carry MASN on the Unlaunched Non-Former-Adelphia
Systems because those systems are not included in the List of Systems
attached to the Term Sheet. Comcast asserts that the exclusion of these
systems from the List of Systems was ``an important part of the
negotiated compromise'' that led to the settlement of the carriage
dispute between Comcast and MASN. MASN notes that the Term Sheet,
however, commits future carriage decisions to Comcast's ``discretion,''
which is constrained by the non-discrimination obligations of the
program carriage rules. By signing the Term Sheet, MASN
[[Page 65326]]
claims that it did not forfeit its rights to insist that Comcast abide
by its program carriage obligations with respect to any Comcast system
within the MASN Territory.
(ii) Unlaunched Former-Adelphia Systems
107. Comcast argues that, under the unambiguous terms of the Term
Sheet, it is not obligated to carry MASN on the Unlaunched Former-
Adelphia Systems because those systems are not included in the List of
Systems. MASN states that it agreed to Comcast's proposal to exclude
certain former Adelphia systems in Roanoke/Lynchburg and other small
Virginia communities based on Comcast's representation that there was
not sufficient capacity to carry MASN on these systems at the time.
MASN explains that Comcast represented to the Commission that it would
rapidly upgrade the former Adelphia systems it acquired in 2006, a
representation that was crucial to the Commission's approval of the
Adelphia transaction. MASN states that, given assurances made by
Comcast to the Commission that it would soon upgrade the Former-
Adelphia systems, thereby providing sufficient capacity to MASN, MASN
viewed Comcast's representations to the Commission as sufficient
protection that MASN would eventually be launched on the Former-
Adelphia systems. Comcast states that it never committed to launch MASN
in Roanoke and other Former-Adelphia systems in Virginia once those
systems were upgraded, nor is such a commitment reflected in the Term
Sheet. MASN notes that, as with the Non-Former-Adelphia Systems, the
Term Sheet commits future carriage decisions to Comcast's
``discretion,'' which is constrained by the non-discrimination
obligations of the program carriage rules. By signing the Term Sheet,
MASN claims that it did not forfeit its rights to insist that Comcast
abide by its program carriage obligations with respect to any Comcast
system within the MASN Territory.
b. Release
108. Comcast argues that the Term Sheet and Release comprehensively
settled MASN's 2005 program carriage complaint against Comcast, in
which MASN requested carriage on ``all Comcast systems,'' including the
Harrisburg and the southwestern Virginia systems, and thereby
relinquished any right MASN may have had to seek any different deal
with Comcast covering Comcast's cable systems in the MASN Territory.
MASN notes, however, that the Release covers only conduct ``until the
date of this Release clause''--that is, up until August 2006. MASN's
complaint, however, concerns Comcast's refusal to exercise its
discretion to carry MASN since 2007 when MASN discovered it was not
being carried on the Unlaunched Systems, well after the date of the
Release. Accordingly, MASN contends that the Release does not justify
Comcast's decision to refuse to carry MASN on the Unlaunched Systems
but to carry its affiliated RSNs.
2. Editorial and Business Justifications
109. Comcast argues that its refusal to carry MASN on the
Unlaunched Systems was based on its editorial and business judgment
that carriage on those systems was not justified in light of a number
of factors, including MASN's carriage cost (both licensee fee and
bandwidth) and its allegedly low consumer appeal.
a. License Fee
110. Comcast contends that MASN would be among the most expensive
networks carried in its Harrisburg and southwestern Virginia systems.
MASN contends that Comcast has submitted no evidence, however,
demonstrating that the cost of carrying MASN is materially greater than
the cost of carrying Comcast's affiliated RSNs in the relevant DMAs.
MASN claims that Comcast provides no justification for applying a
stricter cost standard to unaffiliated programming than to affiliated
programming. Moreover, while Comcast claims that a network's license
fee is a relevant consideration in making carriage decisions, MASN
argues that Comcast has not submitted any evidence that its decision-
makers compared the cost of MASN to the cost of its affiliated RSNs in
deciding to deny carriage to MASN on the Unlaunched Systems but to
grant carriage to Comcast's affiliated RSNs. MASN provides the
following evidence which it claims justifies its license fee for
carriage on the Unlaunched Systems: (i) The carriage rates proposed by
MASN are fair and reasonable in light of the popularity and value of
live sports programming that MASN offers; (ii) every other major MVPD
in the relevant parts of the MASN Territory other than Comcast (such as
Cox, DIRECTV, and DISH Network) has agreed to carry MASN on their basic
or expanded basic tier (or equivalent) at the rates MASN has proposed
for Comcast; (iii) Comcast has agreed to the same carriage terms for
MASN on its systems in other areas (some of which are farther away from
Baltimore and Washington than the Harrisburg and southwestern Virginia
DMAs); and (iv) MASN's rate is comparable to what other RSNs charge and
MVPDs pay for comparable extended inner-market programming.
b. Bandwidth
111. Comcast argues that, because the Term Sheet requires carriage
of MASN on Comcast's expanded basic tier, Comcast would be required to
devote scarce analog capacity to carriage of the network. Moreover,
Comcast notes that MASN would require two analog channels to
accommodate both the Orioles' and Nationals' games. MASN argues that
Comcast has provided no evidence regarding its bandwidth constraints on
the Unlaunched Systems. In addition, MASN contends that Comcast has
failed to justify why its alleged bandwidth constraints on the
Unlaunched Systems justified denying carriage to MASN but granting
carriage to Comcast's affiliated RSNs.
c. Demand-
112. Comcast argues that its refusal to carry MASN on the
Unlaunched Systems is justified based on MASN's low consumer appeal.
Comcast notes that, even in its core Baltimore and Washington, DC,
markets, MASN has the lowest viewership ratings of any RSN in the
country, attracting less than one-third the average number of
households of any other RSN. MASN argues that Comcast has submitted no
evidence, however, demonstrating that the demand for MASN is materially
different than the demand for Comcast's affiliated RSNs in the relevant
DMAs. MASN also alleges that Comcast provides no justification for
applying a stricter demand standard to unaffiliated programming than to
affiliated programming. Moreover, while Comcast claims that demand is a
relevant consideration in making carriage decisions, MASN submits that
Comcast has not provided any evidence that its decision-makers compared
the demand for MASN to the demand for its affiliated RSNs in deciding
to deny carriage to MASN on the Unlaunched Systems but to grant
carriage to Comcast's affiliated RSNs. MASN argues that the following
demonstrates consumer demand for its programming on the Unlaunched
Systems based on the following factors: (i) The decisions of 21 other
major MVPDs throughout the MASN Territory to carry MASN (including
Charter, Cox, DIRECTV, DISH Network, RCN, and Verizon); (ii) Comcast's
efforts to keep the rights to the Orioles games and to acquire the
rights to the Nationals games, both of which are now shown on MASN;
(iii) prior to the launch of MASN, Comcast's
[[Page 65327]]
affiliated RSN carried Orioles games in the Harrisburg DMA; (iv) every
other major MVPD serving Harrisburg (e.g., DIRECTV, DISH Network)
except Comcast has agreed to carry MASN (while Comcast notes that some
small cable operators in Harrisburg that do not carry MASN, we do not
believe that the decisions of a few small cable operators cast doubt on
MASN's value given the evidence of extensive carriage of MASN by other
MVPDs in Harrisburg); (v) prior to the launch of MASN, Comcast's
affiliated RSN carried Orioles games on systems in southwestern
Virginia; (vi) other major MVPDs serving southwestern Virginia (Cox,
DIRECTV, DISH Network) have agreed to carry MASN (while Comcast argues
that, with the exception of Cox's carriage of MASN in Roanoke, most
other cable operators serving southwestern Virginia have made the same
decision as Comcast not to carry MASN, we do not believe that the
decisions of certain cable operators cast doubt on MASN's value given
the evidence of extensive carriage of MASN by other MVPDs in
southwestern Virginia, such as DIRECTV and DISH Network); (vii)
evidence that demand for MASN's programming is comparable to or
eclipses demand for Comcast's affiliated programming in MASN's core
markets on a per-game ratings basis; (viii) MASN is among the top RSNs
in the country with respect to live major professional sports
programming; and (ix) MASN carries other programming of interest to
subscribers in the Harrisburg and southwestern Virginia DMAs, including
sporting events of local colleges. MASN also argues that Comcast's
claim that there is no demand for MASN in Harrisburg is contradicted by
the fact that Comcast has launched MASN on other systems in southern
Pennsylvania, such as in York, Pennsylvania (25 miles from Harrisburg).
Moreover, MASN submits that Comcast's claim that there is no demand for
MASN on the periphery of the MASN Territory is contradicted by the fact
that it carries CSN-MA on the same cable systems in southwestern
Virginia despite the fact that CSN-MA's core sports programming of
Washington Wizards and Capitals games is also based in the Washington
DMA.
G. Conclusion
113. In the Second Report and Order, the Commission stated that it
would identify specific behavior that constitutes discrimination on a
case-by-case basis ``because the practices at issue will necessarily
involve behavior that must be evaluated within the context of specific
facts pertaining to each negotiation.'' Second Report and Order, 58 FR
60390, November 16, 1993. Any complainant alleging a violation of the
prohibition in Section 616(a)(3) on discrimination must demonstrate
that the alleged discrimination is ``on the basis of affiliation or
nonaffiliation'' of a vendor, and that ``the effect of the conduct that
prompts the complaint is to unreasonably restrain the ability of the
complainant to compete fairly.'' After reviewing the pleadings and
supporting documentation filed by the parties, we find that MASN has
established a prima facie case in the above-referenced case under
Section 76.1301(c). We also find that the pleadings and supporting
documentation present several factual disputes as to whether Comcast
discriminated against MASN in favor of its affiliated services.
Accordingly, we direct the ALJ to make and return a Recommended
Decision to the Commission pursuant to the procedures set forth below
within 60 days after release of this Order (i.e., by December 9, 2008).
IV. Referral to Administrative Law Judge or Alternative Dispute
Resolution
114. We direct that an Administrative Law Judge resolve the factual
disputes with respect to the claims and return a recommended decision
and a recommended remedy, if necessary, to the Commission within 60
days of the release of this Order (i.e., by December 9, 2008). Pursuant
to Section 76.7(g)(2) of the Commission's rules, the parties will have
ten days following release of this Order (i.e., by October 20, 2008) to
elect to resolve this dispute through ADR. 47 CFR 76.7(g)(2). Each
party will notify the Commission, in writing, of its election within 10
days of release of this Order (i.e., by October 20, 2008) and, in the
event that ADR is chosen, will update the Commission monthly on the
status of the ADR process. If the parties elect to resolve the dispute
through ADR, the 60-day period for review by an Administrative Law
Judge will be tolled. In the event that the parties fail to reach a
settlement through the ADR process, the parties shall promptly notify
the Commission in writing, and the 60-day period will resume upon
receipt of such notification.
115. Upon receipt of the Administrative Law Judge's recommended
decision and remedy, the Commission will make the requisite legal
determinations as to whether (i) the defendant has discriminated
against the complainant's programming in favor of its own programming,
with the effect of unreasonably restraining the complainant's ability
to compete fairly in violation of Section 76.1301(c); and (ii) only in
the case of NFL Network v Comcast, whether Comcast has demanded a
financial interest in the NFL's programming in exchange for carriage in
violation of Section 76.1301(a). If necessary, the Commission will then
decide upon appropriate remedies.
V. Ordering Clauses
A. WealthTV v. TWC
116. Accordingly, it is ordered, that Herring Broadcasting, Inc. d/
b/a/ WealthTV's Complaint against Time Warner Cable Inc. is Designated
for Hearing at a date and place to be specified in a subsequent order
by an Administrative Law Judge for a recommended determination of the
following issues:
(a) Whether the defendant has discriminated against the
complainant's programming in favor of its own programming, with the
effect of unreasonably restraining the complainant's ability to compete
fairly in violation of Section 76.1301(c);
(b) If the Administrative Law Judge determines that the defendant
has discriminated against the complainant's programming in violation of
Section 76.1301(c), the appropriate price, terms and conditions on
which the complainant's programming should be carried on defendant's
systems and such other remedies as the Administrative Law Judge
recommends.
117. It is further ordered, that pursuant to Section 616 of the
Communications Act of 1934, as amended, 47 U.S.C. 536, and 47 CFR
76.1300-1302, Herring Broadcasting, Inc. d/b/a WealthTV and Time Warner
Cable Inc. submit to the Commission, in writing within ten days of this
Order (i.e., by October 20, 2008), their respective elections as to
whether each wishes to proceed to Alternative Dispute Resolution and,
in the event that Alternative Dispute Resolution is chosen, monthly
update the Commission on the status of that process.
118. It is further ordered, that the Administrative Law Judge,
within 60 days of this Order (i.e., by December 9, 2008), will resolve
all factual disputes and submit a recommended decision and remedy, if
appropriate.
119. It is further ordered, that if the parties elect Alternative
Dispute Resolution, the period for Administrative Law Judge review
shall be tolled, until such time as the parties notify the Commission
that they have failed to reach a settlement through Alternative Dispute
Resolution.
[[Page 65328]]
B. WealthTV v. BHN
120. Accordingly, it is ordered, that Herring Broadcasting, Inc. d/
b/a/ WealthTV's Complaint against Bright House Networks, LLC is
Designated for Hearing at a date and place to be specified in a
subsequent order by an Administrative Law Judge for a recommended
determination of the following issues:
(a) Whether the defendant has discriminated against the
complainant's programming in favor of its own programming, with the
effect of unreasonably restraining the complainant's ability to compete
fairly in violation of Section 76.1301(c);
(b) If the Administrative Law Judge determines that the defendant
has discriminated against the complainant's programming in violation of
Section 76.1301(c), the appropriate price, terms and conditions on
which the complainant's programming should be carried in defendant's
systems and such other remedies as the Administrative Law Judge
recommends.
121. It is further ordered, that pursuant to Section 616 of the
Communications Act of 1934, as amended, 47 U.S.C. 536, and 47 CFR
76.1300-1302, Herring Broadcasting, Inc. d/b/a WealthTV and Bright
House Networks, LLC submit to the Commission, in writing within ten
days of this Order (i.e., by October 20, 2008), their respective
elections as to whether each wishes to proceed to Alternative Dispute
Resolution and, in the event that Alternative Dispute Resolution is
chosen, monthly update the Commission on the status of that process.
122. It is further ordered, that the Administrative Law Judge,
within 60 days of this Order (i.e., by December 9, 2008), will resolve
all factual disputes and submit a recommended decision and remedy, if
appropriate.
123. It is ordered, that if the parties elect Alternative Dispute
Resolution, the period for Administrative Law Judge review shall be
tolled, until such time as the parties notify the Commission that they
have failed to reach a settlement through Alternative Dispute
Resolution.
C. WealthTV v. Cox
124. Accordingly, it is ordered, that Herring Broadcasting, Inc. d/
b/a/ WealthTV's Complaint against Cox Communications, Inc. is
Designated for Hearing at a date and place to be specified in a
subsequent order by an Administrative Law Judge for a recommended
determination of the following issues:
(a) Whether the defendant has discriminated against the
complainant's programming in favor of its own programming, with the
effect of unreasonably restraining the complainant's ability to compete
fairly in violation of Section 76.1301(c);
(b) If the Administrative Law Judge determines that the defendant
has discriminated against the complainant's programming in violation of
Section 76.1301(c), the appropriate price, terms and conditions on
which the complainant's programming should be carried on defendant's
systems and such other remedies as the Administrative Law Judge
recommends.
125. It is further ordered, that pursuant to Section 616 of the
Communications Act of 1934, as amended, 47 U.S.C. 536, and 47 CFR
76.1300-1302, Herring Broadcasting, Inc. d/b/a WealthTV and Cox
Communications, Inc. submit to the Commission, in writing within ten
days of this Order (i.e., by October 20, 2008), their respective
elections as to whether each wishes to proceed to Alternative Dispute
Resolution and, in the event that Alternative Dispute Resolution is
chosen, monthly update the Commission on the status of that process.
126. It is further ordered, that the Administrative Law Judge,
within 60 days of this Order (i.e., by December 9, 2008), will resolve
all factual disputes and submit a recommended decision and remedy, if
appropriate.
127. It is further ordered, that if the parties elect Alternative
Dispute Resolution, the period for Administrative Law Judge review
shall be tolled, until such time as the parties notify the Commission
that they have failed to reach a settlement through Alternative Dispute
Resolution.
D. WealthTV v. Comcast
128. Accordingly, it is ordered, that Herring Broadcasting, Inc. d/
b/a/ WealthTV's Complaint against Comcast Corporation is Designated for
Hearing at a date and place to be specified in a subsequent order by an
Administrative Law Judge for a recommended determination of the
following issues:
(a) Whether the defendant has discriminated against the
complainant's programming in favor of its own programming, with the
effect of unreasonably restraining the complainant's ability to compete
fairly in violation of Section 76.1301(c);
(b) If the Administrative Law Judge determines that the defendant
has discriminated against the complainant's programming in violation of
Section 76.1301(c), the appropriate price, terms and conditions on
which the complainant's programming should be carried on defendant's
systems and such other remedies as the Administrative Law Judge
recommends.
129. It is further ordered, that pursuant to Section 616 of the
Communications Act of 1934, as amended, 47 U.S.C. 536, and 47 CFR
76.1300-1302, Herring Broadcasting, Inc. d/b/a WealthTV and Comcast
Corporation submit to the Commission, in writing within ten days of
this Order (i.e., by October 20, 2008), their respective elections as
to whether each wishes to proceed to Alternative Dispute Resolution
and, in the event that Alternative Dispute Resolution is chosen,
monthly update the Commission on the status of that process.
130. It is further ordered, that the Administrative Law Judge,
within 60 days of this Order (i.e., by December 9, 2008), will resolve
all factual disputes and submit a recommended decision and remedy, if
appropriate.
131. It is further ordered, that if the parties elect Alternative
Dispute Resolution, the period for Administrative Law Judge review
shall be tolled, until such time as the parties notify the Commission
that they have failed to reach a settlement through Alternative Dispute
Resolution.
E. NFL v. Comcast
132. Accordingly, it is ordered, that NFL Enterprises LLC's
Complaint against Comcast Corporation is Designated for Hearing at a
date and place to be specified in a subsequent order by an
Administrative Law Judge for a recommended determination of the
following issues:
(a) Whether the defendant has discriminated against the
complainant's programming in favor of its own programming, with the
effect of unreasonably restraining the complainant's ability to compete
fairly in violation of Section 76.1301(c);
(b) Whether the defendant has demanded a financial interest in the
complainant's programming in exchange for carriage in violation of
Section 76.1301(a);
(c) If the Administrative Law Judge determines that the defendant
has discriminated against the complainant's programming in violation of
Section 76.1301(c) or demanded a financial interest in the
complainant's programming in exchange for carriage in violation of
Section 76.1301(a), the appropriate price, terms and conditions on
which the complainant's programming should be carried on defendant's
systems and such other
[[Page 65329]]
remedies as the Administrative Law Judge recommends.
133. It is further ordered, that pursuant to Section 616 of the
Communications Act of 1934, as amended, 47 U.S.C. 536, and 47 CFR
76.1300-1302, NFL Enterprises LLC and Comcast Corporation submit to the
Commission, in writing within ten days of this Order (i.e., by October
20, 2008), their respective elections as to whether each wishes to
proceed to Alternative Dispute Resolution and, in the event that
Alternative Dispute Resolution is chosen, monthly update the Commission
on the status of that process.
134. It is further ordered, that the Administrative Law Judge,
within 60 days of this Order (i.e., by December 9, 2008), will resolve
all factual disputes and submit a recommended decision and remedy, if
appropriate.
135. It is further ordered, that if the parties elect Alternative
Dispute Resolution, the period for Administrative Law Judge review
shall be tolled, until such time as the parties notify the Commission
that they have failed to reach a settlement through Alternative Dispute
Resolution.
F. MASN v. Comcast
136. Accordingly, it is ordered, that TCR Sports Broadcasting
Holding, L.L.P., d/b/a Mid-Atlantic Sports Network's Complaint against
Comcast Corporation is Designated for Hearing at a date and place to be
specified in a subsequent order by an Administrative Law Judge for a
recommended determination of the following issues:
(a) Whether the defendant has discriminated against the
complainant's programming in favor of its own programming, with the
effect of unreasonably restraining the complainant's ability to compete
fairly in violation of Section 76.1301(c);
(b) If the Administrative Law Judge determines that the defendant
has discriminated against the complainant's programming in violation of
Section 76.1301(c), the appropriate price, terms and conditions on
which the complainant's programming should be carried on defendant's
systems and such other remedies as the Administrative Law Judge
recommends.
137. It is further ordered, that pursuant to Section 616 of the
Communications Act of 1934, as amended, 47 U.S.C. 536, and 47 CFR
76.1300-1302, TCR Sports Broadcasting Holding, L.L.P., d/b/a Mid-
Atlantic Sports Network and Comcast Corporation submit to the
Commission, in writing within ten days of this Order (i.e., by October
20, 2008), their respective elections as to whether each wishes to
proceed to Alternative Dispute Resolution and, in the event that
Alternative Dispute Resolution is chosen, monthly update the Commission
on the status of that process.
138. It is further ordered, that the Administrative Law Judge,
within 60 days of this Order (i.e., by December 9, 2008), will resolve
all factual disputes and submit a recommended decision and remedy, if
appropriate.
139. It is further ordered, that if the parties elect Alternative
Dispute Resolution, the period for Administrative Law Judge review
shall be tolled, until such time as the parties notify the Commission
that they have failed to reach a settlement through Alternative Dispute
Resolution.
G. General Ordering Clauses
140. It is further ordered that, pursuant to Section 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), in order to
avail itself of the opportunity to be heard, each party to an above-
captioned proceeding, in person or by its attorney, shall file with the
Commission, by October 17, 2008, a written appearance stating that the
party will appear on the date fixed for hearing and present evidence on
the issues specified herein. In light of the deadline for a Recommended
Decision contained in this Order, the deadline for written appearances
set forth in 47 CFR 1.221 is waived and replaced with the deadline set
forth above.
141. It is further ordered that, if any complainant in an above-
captioned proceeding fails to file a written appearance by the deadline
specified above, or has not filed prior to that deadline, a petition to
accept, for good cause shown, a written appearance beyond the deadline,
the Presiding Administrative Law Judge shall dismiss the relevant
above-captioned proceeding with prejudice for failure to prosecute.
142. It is further ordered that all parties to the above-captioned
proceedings will be served with a copy of this Order and the Erratum
thereto by e-mail and by certified mail, return receipt requested.
143. It is further ordered that the Chief, Enforcement Bureau,
shall be made a party to each of the above-captioned proceedings
without the need to file a written appearance and will determine the
Enforcement Bureau's level of participation in the proceedings.
144. It is further ordered that a copy of this Hearing Designation
Order and the Erratum thereto or a summary thereof shall be published
in the Federal Register.
Federal Communications Commission.
Monica Shah Desai,
Chief, Media Bureau.
[FR Doc. E8-26147 Filed 10-31-08; 8:45 am]
BILLING CODE 6712-01-P