Indie Channel Wants 9th Circuit to Remand Program Carriage Case to FCC

The ALJ who eventually recommended the full commission vote against WealthTV, which it did last year, said the programmer didn’t meet its burden of proving the cable operators wouldn’t carry the channel because they favored their own Mojo lifestyle network targeted at men. The ALJ, who last year recommended the commission rule in favor of the Tennis Channel’s complaint that Comcast discriminated against it, allowed evidence to be introduced in that case that he wouldn’t allow in the WealthTV proceeding, the appeal said. The evidence was the alleged admission by Chief Operating Officer Stephen Burke that Comcast favors affiliated programming. A commission spokesman declined to comment. Burke is now CEO of Comcast’s NBCUniversal.

Chief FCC ALJ Richard Sippel used different standards in the Tennis Channel’s complaint than with WealthTV because he found the comparability of programming between the plaintiff and channels owned by a defendant applied in the tennis programming case, the appeal said. “The FCC’s standardless adjudication of whether WealthTV was similarly situated to MOJO -- including endorsing Time Warner’s expert’s subjective ‘look and feel’ standard -- led to a different result in Tennis Channel when the same ALJ, without explanation, decided to discard almost precisely the same mode of analysis used by the same expert. Thus, this Court should remand this case to the FCC so that the agency -- as it also should regarding burdenshifting -- can adjudicate this case using clearly-articulated standards that it applies consistently in all carriage-access cases."

Another discrepancy between the FCC’s handling of WealthTV’s complaint and others is a 2008 bureau decision finding Time Warner Cable discriminated against the Mid-Atlantic Sports Network on the basis of affiliation, WealthTV said in a filing posted Monday in docket 11-73134 of the 9th Circuit. “The Media Bureau in MASN correctly noted that the FCC’s Cable Services Bureau had, in earlier program-access cases, adopted a burden-shifting framework.” Sippel in his 2009 recommended decision against WealthTV didn’t address “in depth” that discrepancy that “their plainly requiring that the defendant in a program- or carriage-access proceeding prove that it acted for legitimate, non-discriminatory reasons,” WealthTV said. “Rather, he simply alluded in a footnote to WealthTV’s having discussed MASN and the earlier program-access cases in its Proposed Findings of Fact and Conclusions of Law -- without analyzing them or suggesting why they did not substantively apply to this case."

The FCC violated the Administrative Procedure Act by not consistently applying the burden of proof in cases against multichannel video programming distributors, something that last year’s order on the handling of program carriage disputes in general didn’t fully resolve, WealthTV said. That order “remains silent regarding whether the burden of proof shifts to the MVPD if the Media Bureau determines that the complaining network has established a prima facie case of discrimination,” the appeal said. “Nor do they discuss whether the prima facie determination plays a role in an administrative hearing before an ALJ or, rather, the ALJ conducts the hearing de novo.”

WealthTV’s complaint is “in an area so untested by litigation that the” agency took “inconsistent approaches in several recent administrative proceedings” and “has yet to develop coherent adjudicatory standards to resolve them,” the appeal said. “The FCC engaged in quintessential arbitrary-and-capricious agency decision making.” The filing went over what it called the “internecine turf battle” during Kevin Martin’s chairmanship that “erupted within the FCC, involving two separate ALJs, the Media Bureau, and the FCC’s commissioners over how to adjudicate this case.” The bureau at one point removed the case from Sippel, who after Martin stepped down was given purview again over the case in a full commission decision. That order “however, did not comment on whether burden-shifting should apply, nor did it specify whether the Media Bureau’s initial prima-facie determination should carry any adjudicatory weight.”

The 9th Circuit should order the FCC to “develop and apply clearly-delineating rules” on the burden of evidence and using circumstantial evidence to prove a program carriage violation, WealthTV said. The channel withdrew in October its petition for reconsideration of the order against it because the indie didn’t want to wait longer for that petition to be decided, President Charles Herring told us. “The response times just seemed excessive.” The commission ought to judged by the 9th Circuit on staff and ALJ decisions that weren’t approved by a vote of FCC members because “I don’t think that the commission as a body did anything to really try to understand the case at the level that the administrative law judge did,” Herring said.

The indie has a “difficult” time getting “a critical mass” of about 20 million subscribers because it is not shown on the defendants’ systems, which comprise about 70 percent of U.S. cable customers, the appeal said. WealthTV is on AT&T, Charter Communications and Verizon’s pay-TV services, the appeal said, and Herring said it has about 15 million subscribers now. Spokespeople for Bright House, Comcast, Cox and Time Warner Cable had no comment. Those investors in the Mojo HD channel’s owner stopped carrying it in 2008, and in 2006 and 2007 when those companies decided not to carry all-HD WealthTV, programming in that format was “an important industry differentiator,” the indie said of a time when there was less such content.