Football being blocked by cable?


NFL Commissioner Roger Goodell said he is not looking for any new rules, just application of some grease to the rules already in place at the FCC, claiming that bottlenecking at two large cable companies is making it very difficult for the professional football league to get its NFL Network off the ground.

For the most part, other witnesses on hand at the hearing held by the Subcommittee on Telecommunications and the Internet felt that the free market was doing its job in this case, and that regulators and legislators should stay out of the process. Ken Ferree of Progress & Freedom Foundation, and formerly FCC Media Bureau Chief, said the failure of the NFL to get its channel carried on Comcast and Time Warner on terms it wanted amounted more to the NFL over-reaching rather than a market failure. Time Warner’s Glenn Britt, Time Warner, DIRECTV’s Derek Chang and ESPN’s George Bodenheimer all pushed variations of the same argument.

Goodell, however, complained that the two companies favor their own competing channels, and their size makes it next to impossible to get an independent channel up and running without their cooperation. He said the FCC has machinery to deal with complaints, but that the process is far too slow.

Mark Cooper of the Consumers Federation of America said that the sports leagues and programmers both overcharge for programming, and cable gladly accepts the high rates, merely passing them on to consumers and fueling the extremely high salaries enjoyed by professional athletes these days. He also used the forum to push either full a la carte menu options, or at least, creation of a sports tier so that consumers who do not wish to pay for these typically-expensive channels are not subsidizing the many more who do want them.

RBR/TVBR observation: Joe Barton (R-TX), Ranking Member of the subcommittee’s parent Energy & Commerce Committee, injected a healthy dose of reality to the proceeding, saying, "We have to remind ourselves we’re talking about sports." He said it is not a constitutional right — there is no right to see any games, or to set the price to see them, or to demand that programmers show them at all. He noted that almost all of the witnesses, including Goodell, agreed that the market was basically working and said Congress should let the principals work it out. To that, Ferree noted that there are lots of problems for Congress to grapple with and this isn’t one of them. Thank you, gentlemen, for providing us with the observation we were going to write.

Subcommittee on Telecommunications and the Internet
"Competition in the Sports Programming Marketplace"

Prepared testimony summaries

Ken Ferree: Progress & Freedom Foundation: Negotiations may be tough and even involve brinksmanship, but that does not mean the government should get involved. DIRECTV/News Corp. merger inspired FCC’s Media Bureau to come up with what it thought was a narrow ruling to make sure the merged entities did not leverage regional sports channels to drive subscribers to satellite service. Last year’s NFL issue was not a market failure, it was an example of the NFL overreaching, asking for more cash than the market would provide. Terms in such disputes are best decided over the negotiating table, not in a government agency.

Glenn Britt, Time Warner: Past few years have been marked by new trend, with live events moving from broadcast and cable to league-specific channels. Negotiations may seem messy, but Congress has recognized that they are preferable to regulation. Deciding what to carry is a complicated business judgment. NFL is being disingenuous when it requests help getting carriage while at the same time it limits its distribution.

Roger Goodell, NFL: Comcast and Time Warner use their bottleneck capability to the detriment of independent programmers, and they’ve been using anti-competitive practices to keep the NFL’s channel from being made readily available to viewers. The FCC recognizes the need for carriage reform, but its process in dealing with cases of alleged discrimination is too slow. Negotiations would be fine if conducted in a discrimination-free environment. Cable companies are discriminating against independents in favor of their own channels, which get favored treatment. NFL Network situation is almost exactly the same as the MASN case. NFL Network is small part of the sport’s TV package, far less important than free broadcast.

George Bodenheimer, ESPN: Sports viewers are passionate, and want to be able to see what they want to see. Competition among sports channels is more vibrant than ever, dozens of national and regional channels. In a tough business environment, it is tempting for those not getting what they want to appeal to the government. But the government should leave it to the market. Whatever the government does, it should stay completely out of how programming tiers are created.

Mark Cooper, Consumer Federation of America: Cable prices are skyrocketing, partly due to skyrocketing cost of sports channels forced upon them, fueling skyrocketing player salaries. Cable companies, programmers, leagues combine to increase prices. Programmers and leagues ask for more, and cable companies give because they know they can simply pass the cost on to the consumer. Cable can make or break programming by deciding if it is carried, and how it is carried. Let consumers pick the channels they want. At current prices, a lot of sports channels would be passed by. If that’s no go, at least make sports programming a separate tier.

Derek Chang, DIRECTV: Providing unique, innovative programming has helped satellite grow. Other compete, and DIRECTV responds, the kind of competition that provides program innovation and favorable pricing. Congress made sure that satellite operators had access to must-have programming that cable might have otherwise withheld, but also allowed satellite to develop its own exclusive programming.