The Federal Communication Commission smacked Comcast Corp. yesterday by closing the "terrestrial loophole" that has kept Flyers, Sixers, and Phillies games off DirecTV and the Dish Network.
The FCC voted, 4-1, to close the loophole, which had its biggest national impact in Philadelphia.
Experts warned that changes could be months away and that Comcast could sue to block the rule change.
FCC Chairman Julius Genachowski said in a statement, "Consumers who want to switch video providers shouldn't have to give up their favorite team."
Philadelphia-area sports fans have clamored for the rule change for years. Brad Bierman, 52, a media consultant from Willow Grove, said the FCC "finally realizes that consumers have the right to decide how they want television delivered into their home."
Bierman subscribes to DirecTV and Comcast, but he watches local sports only on Comcast. With the FCC action, "I'll probably drop Comcast TV, but I'll keep their Internet product," he said.
Comcast controls the telecasting of local teams through Comcast SportsNet and claimed the right to withhold carriage agreements because it distributed the games on land-based, or terrestrial, telecom equipment. Federal rules said that if the sports games were not uploaded to a satellite in a regional market, the company did not have to sell the programming to a satellite-TV company.
Comcast had no comment yesterday. In a Jan. 13 letter to FCC officials, the Philadelphia company said closing the loophole was "fundamentally in error."
DirecTV was ecstatic and said in a statement: "The FCC's order today eliminating the terrestrial loophole is a big win for consumers and fair competition in the marketplace. We vigorously applaud the FCC for recognizing that withholding cable-owned regional sports networks from noncable competitors significantly hinders competition and is anticonsumer. We are looking forward to offering DirecTV customers the local sports programming they have been denied for so many years."
Craig Moffett, a senior analyst with Sanford C. Bernstein & Co. L.L.C., estimated the loophole may have boosted Comcast's subscriber base about 450,000 customers in the Philadelphia area.
Comcast says it does not believe the loophole is the competitive advantage that its critics claim.
Verizon Communications Inc. also applauded the FCC action. Verizon says Cablevision in New York withholds the high-definition MSG channel from Verizon's FiOS TV service. The MSG channel broadcasts the Rangers, Knicks, Devils, and Islanders. "We are anxious to sit down and reach an agreement," Verizon spokesman Richard Young said.