FCC OVD Benchmarking Condition Remains on Comcast/NBCU During Bureau Review
The FCC isn’t disrupting an online video distributor (OVD) arbitration condition for OVDs to get programming from Comcast and its NBCUniversal when an Internet video company already has deals from other broadcast, cable or film content owners, a Media Bureau spokeswoman confirmed. Ex-bureau Chief Monica Desai, who met Thursday with current Chief Bill Lake and other bureau staffers, reported they told her that last week’s public notice (CD March 14 p14) on the Comcast/NBCUniversal deal condition won’t interrupt ongoing arbitration. Six of the biggest U.S. programmers and Desai’s client -- Project Concord Inc., which has sought arbitration -- had objected to the change Comcast and NBCUniversal sought.
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Those six programmers now seek a 41-day delay from the commission to comment on the tweak. They've been “dragged into this matter against their will, solely because the Commission arbitrarily defined the class of C-NBCU ‘peers’ to include the specific entities that comprise the Content Companies’ group,” said CBS, Disney, News Corp., Sony Pictures, Time Warner and Viacom. Comcast and NBCUniversal opposed delay.
Media Bureau staff agreed that “nothing” in its public notice is meant to “displace the arbitration” remedy in last year’s FCC order approving Comcast/NBCUniversal, Desai said. Staff said the notice isn’t intended to “interrupt any ongoing arbitration,” she wrote in an ex parte filing posted Friday in docket 10-56 (http://xrl.us/bmyr29). The docket is where the six programmers’ request for delay and Comcast/NBCUniversal’s opposition appeared Monday. A bureau spokeswoman confirmed the substance of Desai’s account of the meeting.
Project Concord fears Comcast/NBCUniversal’s request that the OVD condition be changed so executives at the now-merged companies can see distribution deals with other programmers would make it harder for Web video distributors to use that curb. “At no point during the good faith commercial negotiations did the Commission require that an OVD’s peer deal would be disclosed to any Comcast-NBCU business people -- ever,” Desai wrote (http://xrl.us/bmyr27). “To do so would be anathema in the content distribution marketplace, where programming contracts are highly confidential and almost without exception include obligations not to disclose them absent legal compulsion. OVDs are strictly bound by these confidentiality obligations and cannot violate them. To do so would seriously jeopardize an OVD’s ability to obtain programming in the marketplace, thwarting the very purpose of the Benchmark Condition."
There are “vitally important issues raised in this proceeding,” so the commission should make comments due April 12, replies May 14, the six programmers said. “The exceptionally short filing windows set forth in the Public Notice (14 days for comments; 7 for replies) would make it difficult for the Commission to receive full and informed responses,” said CBS, Disney, News Corp. and the other programmers (http://xrl.us/bmyr29). Comcast and NBCUniversal wouldn’t be hurt by an extension because they and OVDs have “the ability to utilize arbitration to resolve any bargaining impasses -- with respect to both whether an OVD is qualified under the Order and what the fair market value is for contested programming rights,” the six said. “Contracts are maintained in the strictest confidence, with rigorous confidentiality and non-disclosure provisions. The potential competitive harm is greatest where, as here, the prospective recipients of confidential information not only compete directly with the Content Companies in the production and packaging of programming and program services, but also operate the nation’s largest multichannel video programming distributor of those services."
Comcast and NBCUniversal don’t want to wait for a longer comment cycle before their in-house lawyers and executives could get access to OVD agreements with other programmers. “Clarification from the Bureau is needed urgently so that the companies can meet their obligations,” Comcast and NBCUniversal said. The content companies have known of the request for almost a month, Comcast and NBCUniversal said (http://xrl.us/bmyr5f). “The Request is procedural in nature -- the companies seek guidance on what process should be followed to ensure that OVDs can make efficient use of the Benchmark Condition and NBCUniversal has access to the peer deal on confidential terms that protect the interests of the peer.”