The issue: Whether or not Comcast was discriminating against The Tennis Channel, failing to offer it similar carriage to other sports networks it happens to own. According to the District Court for the DC Circuit, the evidence points to Comcast’s carriage being nothing more than a legitimate business decision.
The Court cited Comcast’s explanation of its thinking when determining whether or how to carry a given program service, as explained in the testimony of a Comcast executive who said, “In deciding whether to carry a network and at what cost, Comcast Cable must balance the costs and benefits associated with a wide range of factors, including: the amount of the licensing fees (which is generally the most important factor); the nature of the programming content involved; the intensity and size of the fan base for that content; the level of service sought by the network; the network’s carriage on other MVPDs; the extent of [most favored nation]1 protection provided; the term of the contract sought; and a variety of other operational issues.”
The Court said that to prove discrimination it was incumbent upon the FCC and the Tennis Channel to prove that it offered benefit to Comcast, and was turned down for the level of carriage it sought despite this benefit.
This neither was able to do. It was argued that the channel was less costly, but that still does not necessarily translate into benefit for Comcast. Writing the opinion, Judge Brett M. Kavanaugh explained, “Even if we were to assume arguendo that low charges per ratings point are the be-all and the end-all of assigning a network to a broadly accessible tier (and the record does not support such an assumption), the cost-perratings-point evidence would at most show that (by this particular criterion) Tennis’s gross cost is not as high as that of either Golf or Versus. It does not show any affirmative net benefit. As to the assumption about cost per ratings point, the sealed record suggests (consistent with Comcast’s evidence about the factors guiding its tier placement decisions) that a very high price per rating point is by no means an absolute barrier to placement in a broadly available tier.”
The FCC’s Ajit Pai weighed in on the decision. He said, “I am pleased that the U.S. Court of Appeals for the D.C. Circuit has overturned the Commission’s 2012 decision that Comcast had unlawfully discriminated against Tennis Channel. This ruling is a big win for consumers. As former Commissioner McDowell and I explained in our joint dissent, the Commission’s ruling would have resulted in cable operators paying to carry channels that they didn’t want, and these higher programming costs would have come out of the pockets of American consumers.”
Pai continued, “With this case concluded, I hope that the Commission will heed the lesson of today’s D.C. Circuit decision and refrain from attempting to micromanage cable operators’ programming decisions. Given the current state of the video marketplace, I agree with Judge Kavanaugh that “the FCC cannot tell Comcast how to exercise its editorial discretion about what networks to carry any more than the Government can tell Amazon or Politics and Prose or Barnes & Noble what books to sell; or tell the Wall Street Journal or Politico or the Drudge Report what columns to carry; or tell the MLB Network or ESPN or CBS what games to show; or tell SCOTUSblog or How Appealing or The Volokh Conspiracy what legal briefs to feature.”