FCC seeks to close "terrestrial loophole"

The Federal Communications Commission will seek to close a loophole that has kept Phillies, Sixers, and Flyers games off satellite TV in Philadelphia and given a huge competitive advantage to Comcast Corp.

An FCC official said the agency would circulate an order today that will close the "terrestrial loophole" that allows Comcast to withhold Comcast SportsNet Philadelphia from DirecTV and Dish Network.

The five-member regulatory board could vote on the order in January.

FCC Chairman Julius Genachowski says the loophole should be closed to level the competitive playing field among pay-TV companies, a commission official said. The move is one of Genachowski's first major acts involving cable and satellite companies at the agency.

The FCC, which had been discussing the issue internally, first disclosed its plans yesterday to lawmakers on Capitol Hill.

Comcast, which has consistently fought in the courts and at the FCC to protect the loophole, had no comment yesterday. The company also faces a tough FCC regulatory battle in 2010 over its proposed acquisition of entertainment giant NBC Universal Inc.

For years, the terrestrial loophole has been a source of angst for Philadelphia area sports fans because it forces them to subscribe to Comcast to watch the local teams on television. Because of the loophole, experts say, satellite TV's market penetration in Philadelphia is one of the lowest in the United States.

The rule says Comcast can withhold its regional sports network from satellite companies because the programming content is distributed on land-based data lines.

Susan Eid, DirecTV's senior vice president for government affairs, said yesterday that her company was pleased with the FCC's action.

"Comcast has denied fans from watching their local teams to stifle competition from satellite," Eid said in a statement. "We applaud this effort by the FCC to address this anti-consumer, anti-competitive behavior."

David L. Cohen, Comcast's executive vice president, said recently that the loophole was created as an incentive for companies to invest in regional sports networks and that it should remain in place.

In a briefing with reporters earlier this month, Cohen criticized DirecTV for its exclusive Sunday Ticket deal with the National Football League for out-of-market football games, which has hurt Comcast and other cable companies.

In recent years, the terrestrial loophole's competitive advantage has diminished as Comcast SportsNet Philadelphia's programming has been available on Verizon Communications Inc.'s FiOS TV service.