Tennis Channel Wants To List What Comcast Endured To Stifle Competition, It Says in Oral Argument
If the U.S. Court of Appeals for the D.C. Circuit reopens Tennis Channel's complaint against Comcast, the sports programmer would likely produce expert evidence to the FCC showing all the business pain the cable company has endured in order to stifle competition to affiliated programming, from advertising revenue to audience interest in content, said Stephen Weiswasser of Covington & Burling, representing the channel, during oral argument Monday. Tennis Channel is appealing a 2015 FCC decision denying a program carriage complaint (see 1501280059) that mirrored a 2013 U.S. Court of Appeals for the D.C. Circuit decision, after the commission previously found in favor of the independent programmer. The three-judge panel's decision likely will come in two to three months, lawyers told us.
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Much of the back-and-forth among Tennis Channel, the FCC and the judges was over whether the agency had instituted a new test for Section 616 of the Communications Act, on carriage discrimination. Weiswasser said the FCC administrative law judge is facing a very similar issue with Game Show Network's re-tiering complaint against Cablevision, and reopened the record there in 2014 to allow new evidence based on the premise that test for proving discrimination against an independent programmer had been modified, Weiswasser said. FCC ALJ Richard Sippel was in the courtroom audience Monday during oral argument, as was FCC General Counsel Jonathan Sallet.
Judge Judith Rogers asked Weiswasser at one point why, when Comcast offered evidence that its Tennis Channel carriage decision was based on nondiscriminatory business metrics, the channel didn't then reply with some of its evidence. Weiswasser said it responded then with evidence that fit the standard then in the case, showing Comcast was profiting through shielding itself from competition by "keeping Tennis Channel weak and small." FCC counsel Scott Noveck said since Comcast's defense was that its Tennis Chanel decision was based on a cost-benefit analysis, it "naturally" should have occurred to the channel to present its own cost-benefit evidence then.
The 2013 appellate court decision disagreed with the FCC on the agency's analysis that ratings points correlate with revenue, since in a subscription model it's very difficult to separate out how much one channel drives subscriptions to a package -- something Tennis Channel itself indicated, Noveck said. He also said it was "eminently reasonable" for the FCC not to reopen the record since the channel never indicated until the oral argument what new evidence it might enter and why it didn't show that evidence before.
At one point, Rogers asked about a concurring opinion by Judge Harry Edwards in the 2013 Comcast v. FCC decision overturning the agency's previous Tennis Channel order. There, Edwards said that "even accepting the FCC’s interpretation of Section 616, there is no substantial evidence of unlawful discrimination to support the Commission’s decision in this case." That, Rogers said, seemed to indicate a disagreement on whether there had been a change to Section 616 standards. Responded Noveck, "I think it was just rhetorical flourish.”
When Judge Cornelia Pillard said the court isn't inclined to redo what the previous panel did or to characterize the FCC's decisions differently from how the agency itself has, Weiswasser said Tennis Channel is challenging only the FCC decision to change the test, not any court decision. At one point, Pillard asked Weiswasser what evidence there was that Comcast's own economic analysis was inadequate. He said the FCC's own chief economist showed that Comcast -- in markets where it's facing more heated competition -- carries Tennis Chanel more broadly than it does in lesser competitive markets. Weiswasser also said Comcast generally carried the channel at lower penetration than did other multichannel video programming distributors without affiliated competitive programming to protect. The FCC, seeing those two pieces of evidence, should have considered reopening the record for the limited purpose of receiving additional evidence, he said.
Pillard and Rogers also asked both sides about D.C. Circuit jurisdiction over an FCC decision. "We're not looking around for any way to create judicial review we wouldn't otherwise get," Weiswasser said. He said the Tennis Channel is "comfortable" relying on an argument of "changed circumstances," and if the appellate court finds there was no change in the FCC test, "We're prepared to live with it." Judge Janice Brown asked no questions during oral argument.
Rogers also challenged the FCC on its urging the case be brought to a close (see 1510220019) since the agency has issues before it "that have gone on for decades" -- a comment that elicited some chuckles from audience in the courtroom. Noveck said its argument is based on Tennis Channel's having had full opportunity to present its case and the FCC's interest "in finality and certainty.”
Representing intervenor Comcast, Jonathan Bond of Gibson Dunn said that the concurring opinions of the previous panel "would have at least confronted" discrimination by Comcast if there was evidence of that. "This court, when it intends to remand, it says so," he added. The judges asked no questions of Comcast.