FCC steps into Comcast-NFL Network fight

The FCC will referee this one.

Comcast Corp. and the NFL Network are taking their program-carriage beef to Washington, where they will butt heads in a courtroom at the Federal Communications Commission.

The outcome of the case, which begins Tuesday, could determine whether Comcast has to carry the NFL Network on its cable system, so millions of Comcast customers would see it without an extra $7 monthly charge.

Comcast's contract with the NFL Network expires April 30. Comcast has said it would continue to carry NFL Network on its sports tier until the FCC case is resolved. But the NFL Network has not agreed, and both sides say the NFL Network could temporarily disappear from Comcast in May.

Even for non-sports fans, though, this is a significant case, experts say. It is the first big test at the FCC of a 1992 federal law that prohibits cable companies, such as Comcast, from favoring their own entertainment content over that of independents, such as the NFL Network.

The NFL Network, the programming offshoot of the National Football League, says Comcast gives preferential treatment to Versus and Golf, which it owns.

If FCC chief administrative law judge Richard L. Sippel finds that Comcast violated the law by exiling the NFL Network to the sports package, and the five-member FCC commission agrees, the ruling could make it easier for independent programmers to gain access to cable systems, experts say.

"We are on the side of the NFL on this," said Andrew Jay Schwartzman, president of the left-leaning Media Access Project. "The cable industry has used its bottleneck control over access to customers."

But free-market advocates take Comcast's side, saying that the FCC should stay out of this scrimmage and that Comcast and the NFL Network should privately negotiate a carriage deal.

"Why should the government get into this?" asked Adam Thierer, senior fellow at the market-oriented Progress and Freedom Foundation. "Sports is a heated topic of debate even among people in the same household."

The Comcast-NFL Network case is one of three similar complaints that Sippel will hear over the next two months. In the second, WealthTV claims it was denied a cable channel when the cable companies launched a copycat channel, Mojo. Mojo, according to an FCC filing, was owned by Comcast, Time Warner Cable, Cox Cable and Bright House Networks.

WealthTV is something of an updated Lifestyles of the Rich and Famous and was founded earlier this decade by Robert Herring, of San Diego, a former electronics manufacturer.

Herring claims that the cable companies launched Mojo as he tried to persuade them to carry WealthTV and after briefing the companies, including Time Warner, on its programming. Mojo was canceled last year, apparently because of poor ratings.

"I thought that if you had something really good, and people liked it, the cable companies would put it on," Herring said in a phone interview. "Our goal was not to get into a fight with anyone."

The third dispute involves the MidAtlantic Sports Network Inc., which seeks to have Comcast carry Orioles and Nationals baseball games in Harrisburg and Roanoke, Va. Comcast says it does not have to.

Former FCC Chairman Kevin Martin, a Bush appointee and cable critic, began the process for the three carriage-dispute proceedings. The new Obama administration will handle them.

The most controversial is between Comcast and the NFL, two of the biggest players in sports.

"We are just being asked to be treated fairly - the same way they treat their own networks," Steve Bornstein, president and chief executive officer of the NFL Network, said Wednesday. "The price is irrelevant. It's about distribution."

The NFL Network says Comcast, the nation's No. 1 pay-TV company, discriminated against it by putting the channel on the extra-cost sports package, which costs $7 a month on top of fees for basic service. By comparison, the NFL says, the Comcast-owned Versus and Golf Channel, along with the Comcast regional sports networks, are carried on general-audience tiers on the Comcast system without extra charges.

The economics are simple: Channels on Comcast's general-audience channel tiers, without the extra charges, have more viewers. Those channels are more valuable because of subscription fees and a bigger audience for advertisers.

The core of the NFL Network's programming is eight live NFL games. The network also broadcasts "classic" football games and covers events such as the NFL draft.

The NFL has complained publicly about Comcast and sued the company in state court in New York. "I can't think of a programmer who is successful without a deal with Comcast," Bornstein said.

NFL officials seem particularly bothered, it seems, that Comcast has been rapidly increasing its extra-cost sports tier with the NFL Network's popular content.

Comcast, said David Cohen, executive vice president, believes that the NFL Network is overpriced, has too few live games, and is too narrowly focused for a general audience. The company does not consider Versus and the Golf Channel appropriate comparisons.

Comcast also claims a First Amendment right to select entertainment, news and other content for its cable system without interference by the government.

Comcast is protecting customers from higher cable bills by keeping NFL Network on the sports tier, Cohen said. That way, the monthly subscription fees are focused on sports fans, not everyone.

"This is not a case of some fledgling network that Comcast is pushing around," Cohen said.

Comcast has not said how much more it would cost an average subscriber if it had to put the NFL Network on a general tier. But, Cohen said, if Comcast relents the company's customers will be "stuck with a very large bill, which will allow the NFL owners to create an asset worth billions of dollars."