FCC Hearing Starts on NFL Carriage Complaint Against Comcast

Chief FCC ALJ Richard Sippel probed both sides on claims made in opening arguments. He then closed the hearing room to the public so the NFL’s expert witnesses could discuss contractual and other data the parties want to keep private. Lawyers for both sides said that decision was one of the few things they both agreed on.

Comcast contended it acted fairly in not carrying the NFL Network widely on its systems because it costs three times more than networks owned by the company featuring golf and other sports. “It’s price that is at the heart of this,” said Michael Carroll, representing Comcast. Not so, said Gregg Levy for the NFL: The “core issue in this case is whether Comcast abused its status as a vertically-integrated carrier” by giving preferential treatment to networks it owns stakes in like the Golf Channel, MLB Network and Versus over the football league’s programming, said Levy.

Those three Comcast-affiliated channels have “broad penetration” on the company’s systems, which means the programmers “command” more from advertisers, Levy said. In 2006, two years after the cable company and league began a carriage deal, Comcast moved the NFL Network to a “sports tier” with far fewer subscribers, he added. “Comcast’s own witnesses acknowledge that it hurts a channel to be put on a sports tier.” The company is barred by law from treating channels it owns differently than others, regardless of a contract, said Levy. “All of Comcast’s competitors are carrying the NFL Network on broadly distributed means.”

Comcast seems to find the network’s programming valuable because it offered to “pay a large sum” to put the same games that are on the NFL Network on its Versus channel, Levy said. “It demanded that the NFL Network … give to Comcast its most valuable programming,” namely eight games, he said. If that did not happen, as was the case, Comcast said “it would make life difficult,” Levy added.

Sippel then asked if “really it’s a question of price.” If the two sides “can agree on a price, that programming is going to go where you want it,” he said. Levy said money isn’t grounds for discrimination: “This statute imposes no obligation” on programmers and is a “one-way ratchet,” he replied to a question from the judge about whether the NFL could also discriminate by withholding its content unless it got the price it wanted. “They impose the obligation on the vertically-integrated carrier not to discriminate,” Levy said. Sippel asked if there’s any basis for Comcast to say it doesn’t want to carry the NFL Network. If Comcast-owned channels have wide dissemination on the cable operator’s systems, “the answer is no, your honor,” Levy replied.

The NFL may poke fun at the bull riding and deer hunting featured on its affiliated networks, Carroll said. But that’s year-around programming, compared to “these eight games that we're fighting about” which “used to be on ABC, CBS for free.” The NFL’s strategy is to make its channel “one of America’s most expensive, Carroll said. “Cable companies, for all of their imperfection … want to keep the cost” of their programming, and hence cable bills, as low as possible, he added.

The league is breaching is contract with Comcast by bringing the complaint to the FCC, Carroll said. “The remedy they're asking for is well beyond anything in the contract,” he added. “They're asking to turn their back” on the deal and “it is the most galling thing that they're here” while also litigating a case against Comcast in New York, Carroll said. Sippel asked why a contract that a court in that state said was unclear should be paid heed. “They don’t have the decency to drop the New York lawsuit,” Carroll said. “You can’t play fast and loose under courts and tribunals.” Comcast hasn’t “discriminated against them except on price,” he added. “If that’s a sin … then lock us up.”