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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C.

20554

In the Matter of Revision of the Commissions Program Carriage Rules

) ) ) ) ) )

MB Docket No. 11-131

REPLY COMMENTS OF CURRENT TV LLC; NFL ENTERPRISES LLC; AND THE TENNIS CHANNEL, INC.

Gerard J. Waldron Robert M. Sherman Neema D. Trivedi Stephen A. Weiswasser COVINGTON & BURLING LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004

January 11, 2012

TABLE OF CONTENTS Page INTRODUCTION .......................................................................................................................... 1 DISCUSSION ................................................................................................................................. 5 A. C. D. E. F. B. Section 616 Remains Relevant and Is More Necessary Today Than At Any Time Since Its Passage.................................................................................... 5 Section 616 Is Not Limited In Its Application to Vertically-Integrated Entities .................................................................................................................... 7 The Limitations Period for Program Carriage Actions Should Begin to Run Only Upon the Reasonable Discovery of a Violation of the Rules ............... 10 Discovery Should Be Streamlined and Administered, At Least Initially, By the Media Bureau ............................................................................................ 12 Baseball-Style Final Offer Arbitration Should Be Available to Encourage Private Resolution of Disputes.............................................................................. 14 The Commissions Proposals Do Not Violate The First Amendment .................. 15

CONCLUSION ............................................................................................................................. 18

Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 ____________________________________ ) In the Matter of ) ) Revision of the Commissions Program ) MB Docket No. 11-131 Carriage Rules ) ____________________________________)

REPLY COMMENTS OF CURRENT TV LLC; NFL ENTERPRISES LLC; AND THE TENNIS CHANNEL, INC.

INTRODUCTION AND SUMMARY Current TV LLC; NFL Enterprises LLC; and The Tennis Channel, Inc. (collectively, the Joint Commenters) applaud the Commissions efforts to strengthen the program carriage rules and create meaningful enforcement mechanisms to protect the rights of independent networks.1 The strong support for the proposed reforms, expressed in the comments submitted by programming vendors and the public interest community, underscores the continuing need for program carriage regulation. The Commissions proposals to reform the program carriage rules are critical to promoting the statutory public interest goals of fair competition and diversity in the video marketplace. As stated in our original comments, in order to ensure meaningful enforcement of Section 616, the rules should be revised to eliminate the barriers that deter networks from seeking relief. They should also promote expedition because only speedy resolution neutralizes
1

See Revision of the Commissions Program Carriage Rules, Notice of Proposed Rulemaking, MB Docket No. 11-131, FCC 11-119 (rel. Aug. 1, 2011) [hereinafter NPRM or Notice].

the resource advantages enjoyed by MVPDs and the cost constraints faced by networks. Finally, program carriage regulation should both deter MVPDs from engaging in prohibited conduct and encourage MVPDs and independents to resolve their disputes privately without the expense of litigation, through the use of alternate dispute devices such as voluntary baseball-style arbitration. The Commissions proposals are a significant step toward achieving these goals. Not surprisingly, members of the cable industry seek retrenchment. The MVPDs submitted comments designed not to streamline the adjudication process, clarify the parties obligations, or aid and accelerate decisionmaking, but rather to weaken the existing rules. The Commission is asked to exempt certain MVPDs from coverage under Section 616, to scale back or even eliminate program carriage regulation, and in effect, to enshrine the principle that, no matter how predatory, MVPD actions that weaken independent networks or strengthen affiliated ones at the expense of independents are justified under the program carriage rules so long as they help an MVPDs bottom line. And the MVPDs seek to rehash boilerplate arguments that the Commission has already considered and rejected, including, for instance, the arguments that program carriage regulation infringes on an MVPDs First Amendment rights and that the Commission should effectively repeal Section 616 despite Congresss decision not to do so because, the MVPDs say, regulation is no longer necessary in the current video programming marketplace.2 More generally, the MVPD submissions reflect a fundamental misunderstanding of how independent networks run their businesses. The MVPD commenters complain that the proposed reforms would encourage the filing of frivolous complaints and welcome unwarranted
2

See, e.g., Comments of Cablevision Systems Corp. at 3-6, 16-20; Comments of Comcast Corp. at 7-29; Comments of National Cable & Telecommunications Association (NCTA) at 1-4; Comments of Time Warner Cable Inc. at 2-7.

fishing expeditions through costly discovery.3 The misconception that an independent network has resources to waste on meritless litigation and superfluous discovery only underscores how little MVPDs understand about the challenges and burdens faced by independents. Most independent networks cannot afford to engage in costly litigation unless they believe that the Commissions procedures allow them to have a reasonable chance of obtaining useful and timely relief if they are successful. The MVPD commenters suggestion that the business reality is any different for an independent network reflects the fact that these MVPDs are most familiar with the operations of their own affiliates affiliates that have the backing, resources, and leverage of their parent companies. Most independent networks operate without the resources and leverage of an industry leader like Comcast or Cablevision, and have not, until recently, considered investment in expensive Section 616 litigation to be worth the attenuated and risky process they would encounter. In initiating this rulemaking proceeding, the Commission correctly recognized that the program carriage rules are in dire need of revision, and virtually all of the commenters outside of the MVPD industry including, importantly, commenters that are not programmers agreed with that perception. In these Reply Comments, the Joint Commenters respond to only a subset of the misguided arguments offered by the distribution industry and their affiliates. Specifically, these Reply Comments demonstrate that: There is a continuing need for program carriage regulation. Section 616 remains on the books, and the Commission is bound to enforce it, because the industry is more consolidated and as vertically integrated as it was in 1992. Indeed, the Commission time and again has found reason to conclude that regulation is still necessary to protect the rights of independent networks.

See, e.g., Comments of Comcast Corp. at 4, 33-34; Comments of DIRECTV, Inc. at 20; Comments of the NCTA at 4-5; Comments of Time Warner Cable Inc. at 12.

Section 616s proscriptions are not limited to vertically-integrated MVPDs. The plain language of the statute, and the realities of the marketplace, require that the rules apply to all MVPDs. The Commission should clarify the applicable statute of limitations to require that a network file its program carriage complaint within one year of its reasonable discovery of an MVPD violation of the rules. The rules should prevent MVPDs from using discovery as an economic weapon against networks and should instead facilitate the Media Bureaus early resolution of basic legal and factual issues. Accordingly, the Joint Commenters have proposed discovery procedures designed to reduce undue costs and burdens on independents. At the same time, discovery should not be so limited as to hinder a networks ability to discover the evidence it needs to prove its case. Baseball-style final offer arbitration should be made available to the parties during the pendency of a proceeding and after a violation has been found, but participation should be voluntary. The Commissions proposed reforms are constitutional because they advance the important government interests of competition and diversity in video programming and do not infringe legitimate First Amendment rights.

The Joint Commenters discuss these proposals in more depth below. More broadly, these Reply Comments encourage the Commission to move forward in its efforts to reform the program carriage rules rather than accepting the invitation of the cable industry to move backwards and violate Section 616 by interpreting the statute and its critical policy foundations out of existence.

DISCUSSION A. Section 616 Is a More Important Regulatory Tool Today Than At Any Time Since Its Passage. Several MVPDs devoted significant attention in their comments to the question of whether Section 616s proscriptions remain necessary today, given supposed changes in the distribution marketplace4 a question that was not posed by the Commission and is outside of the authority of the Commission to answer. These MVPD submissions ignore the simple fact that Congress has not repealed the statute or even questioned its continuing vitality. Quite obviously, the Commission is thus obligated to implement Congresss directive. It has no discretion to effectively kill the statute by failing to enforce its provisions. Nor does it want to. Indeed, the Commission has reaffirmed the continuing need for program carriage regulation on numerous occasions, including in the very same order with which it issued its Notice. It there found that the substantial government interests in promoting diversity and competition remain.5 It determined that the supposed marketplace changes cited by MVPDs do not undermine Congresss finding that cable operators and other MVPDs have the incentive and ability to favor their affiliated programming vendors in individual cases, with the potential to unreasonably restrain the ability of an unaffiliated programming vendor to compete fairly.6 In other contexts, the Commission has highlighted that the concerns underlying Section 616 remain in force today. For instance, in 2007, the Commission extended the program
4

See, e.g., Comments of Cablevision Systems Corp. at 3-6; Comments of Comcast Corp. at 7-17; Comments of NCTA at 1-3; Comments of Time Warner Inc. at 4-6. 5 Leased Commercial Access; Development of Competition and Diversity in Video Programming Distribution and Carriage, Second Report and Order, MB Docket No. 07-42, FCC 11-119, at 33 (rel. Aug. 1, 2011) [hereinafter Second Report & Order]. 6 Id.

access rules on the grounds that vertically integrated providers continue to have the ability and incentive to favor their affiliates such that competition and diversity in the distribution of video programming would not be preserved and protected.7 And, in 2010, the Commission found that cable operators continue to have an incentive and ability to engage in unfair acts or practices involving their affiliated programming, and that regulations intended to promote competition in the video distribution market in accordance with the objectives of Congress are still warranted.8 The increasing consolidation and vertical integration in the cable industry makes program carriage regulation more critical than ever. As the Commission has observed, with the recent merger of Comcast and NBC Universal the number of cable-affiliated networks has increased, thereby highlighting the continued need for an effective program carriage regime.9 The FCCs own empirical analysis showed that even before its merger with NBCU, Comcast engaged in anticompetitive discrimination, favoring its affiliated programming in carriage and channel placement decisions.10 It thus forecast that the combination of Comcast, the nations largest MVPD and to date the most frequent defendant in program carriage cases, with NBCU, the nations fourth-largest owner of national cable networks would result in an entity with increased ability and incentive to harm competition in video programming by engaging in foreclosure strategies or other discriminatory actions against unaffiliated video programming
Implementation of the Cable Television Consumer Protection and Competition Act of 1992, 22 FCC Rcd. 17791, 17810 (Oct. 1, 2007). 8 Review of the Commissions Program Access Rules & Examination of Programming Tying Arrangements, 1st Report & Order, 25 FCC Rcd 746 25, 42 (2010). See also id. 7, 26, 29, 30 & nn. 87, 172. 9 Second Report & Order 33; see also Applications of Comcast Corp., General Elec. Co. and NBC Universal, Inc. For Consent to Assign Licenses and Transfer Control of Licensees, Mem. Op. & Order, MB Docket No. 10-56, FCC 11-4, at 116 (rel. Jan. 20, 2011). 10 Id. at Tech. Appx. 65, 70-71.
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networks.11 To scale back program carriage regulation now, at a time of unprecedented consolidation in the video marketplace, would be counterintuitive and contrary to the express Congressional mandate contained in Section 616. Accordingly, the Commission should decline the cable industrys invitation to reopen a long-settled debate on the continued vitality of Section 616. Instead, in this rulemaking proceeding, the Commission should maintain its focus on creating an enforcement regime that implements Section 616 fairly and effectively, as Congress intended. B. Section 616 Is Not Limited In Its Application to Vertically-Integrated Entities. The MVPD commenters have made a variety of arguments that, collectively, stand for the proposition that the Commission should not enforce Section 616 as it was directed to do by Congress. Perhaps the most striking is their request that the Commission exempt some distributors from Section 616 enforcement altogether. The American Cable Association, for example, would read into the statute a requirement that it apply only to vertically-integrated cable operators; Cox would add to the statute a carve-out for MVPDs that have only minority interests in programming networks; and Verizon seeks a wholesale exemption from the rules for new entrants in the cable marketplace.12 These appeals for limiting the reach of Section 616 ignore both the plain language of the statute and the realities of the marketplace, and they must be rejected.

11 12

Id. 116. Comments of American Cable Association at 1-2; Comments of Cox Communications, Inc. at 2, 4-5; Comments of Verizon at 1-2.

First, the plain language of Section 616 makes clear that its proscriptions reach all cable operators or other multichannel video programming distributors13 not merely those that are vertically-integrated.14 Nowhere in the text of the statute, or in the Commissions implementing regulations, is there any indication that the rules apply only to vertically-integrated MVPDs or to incumbent cable operators. Second, the provisions of Section 616 that prohibit MVPDs from requiring a financial interest in a network or demanding exclusive rights as conditions of carriage are plainly applicable to all distributors. Charter, for instance, contends it is a pure play cable operator because it has no affiliated program services.15 Even if Charter were right that its non-verticallyintegrated status means that it has no incentive to discriminate against independent programmers, it does not follow that it should be relieved of the statutory prohibition against requiring an independent network to give it equity in exchange for carriage in the future, or against insisting on exclusive carriage. Third, even without owning any affiliated programming services, an MVPD has the incentive and power to engage in predatory conduct that Section 616 is intended to protect against, and there is no reason let alone any statutory authority for relieving MVPDs of those obligations. For example, there is good reason to believe that distributors, regardless of

13 14

47 U.S.C. 536(a). Likewise, the program carriage rules define MVPDs broadly as including an[y] entity engaged in the business of making available for purchase, by subscribers or customers, multiple channels of video programming. Such entities include, but are not limited to, a cable operator, a BRS/EBS provider, a direct broadcast satellite service, a television receive-only satellite program distributor, and a satellite master antenna television system operator, as well as buying groups or agents of all such entities. 47 C.F.R. 76.1300(d). 15 Comments of Charter Communications at 1.

their own vertical integration, may favor networks owned by their peers as part of a you scratch my back, Ill scratch yours-type arrangement.16 The rules also apply on their face to MVPDs regardless of how long they have been providing service. Whether or not Verizon is what it calls a new entrant[] in the distribution marketplace17 it has now been providing MVPD service for almost seven years its desire to expand its reach in the video marketplace does not give it a free pass to engage in conduct that Congress has otherwise proscribed. Indeed, Verizon may be just as able, and indeed just as likely, to demand equity or exclusivity from a network as an incumbent operator like Comcast. It accordingly should be held to the same statutory limits. Finally, all MVPDs, regardless of their tenure or holdings, should have the same good faith negotiation obligations as vertically-integrated incumbent operators. It is the experience of the Joint Commenters that even those MVPDs that do not have significant content holdings, or that are recent arrivals in the distribution marketplace, can and do engage in unfair
See generally Comments of Current TV LLC; Game Show Network, LLC; NFL Enterprises LLC; and The Tennis Channel, Inc. at 12-13 [hereinafter Joint Independent Programmer Comments]. A striking example of the impact of affiliation on a networks decisionmaking is the joint submission of Cablevision-controlled MSG Holdings, L.P. and Music Choice, which opposes reforms that would make it more straightforward for networks to obtain relief from discrimination by cable operators. Presumably, these reforms would be helpful if MSG or Music Choice faced Section 616 violations in its relationships with other MVPDs, but the fact that MSG and Music Choice oppose them suggests that they are either motivated to serve the interests of their owner or feel confident that their affiliation with Cablevision will give them advantages in the marketplace that render Section 616 unnecessary for them. MSG and Music Choice argue that that they do not derive any benefit in the marketplace merely by virtue of the fact that they are deemed to be affiliated with cable operators and point to the fact that the majority of networks carried on MVPDs in the United States today are not MVPD-affiliated. Comments of MSG Holdings, L.P. and Music Choice at 6. But this reasoning ignores the far more favorable level of carriage and channel positioning that affiliated networks often enjoy as compared to unaffiliated networks. For instance, Comcast-owned networks Golf Channel and Versus enjoy broad carriage unavailable to unaffiliated sports networks (with the exception of market giant ESPN) and prime real estate on Comcasts channel line-up. See The Tennis Channel, Inc. v. Comcast Cable Communications, L.L.C., Initial Decision, MB Docket No. 10-204, File No. CSR-8258-P, FCC 11D-01, at 57, 117 (rel. Dec. 20, 2011) [hereinafter Tennis Channel v. Comcast, Initial Decision]. 17 See Comments of Verizon at 1.
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negotiation practices. Like vertically-integrated operators, they can refuse to negotiate with a network altogether without providing any reasons for denying carriage. And they can offer meaningless counterproposals to maintain the appearance of good faith negotiation while rejecting a networks request for fair carriage. Because MVPDs control a networks ability to reach needed viewers, they possess extraordinary leverage in carriage negotiations. And while it may be the case that a large MVPD like Comcast, with affiliated services and dominance in major media markets, can exert more leverage than an independent MVPD serving rural customers, even such smaller MVPDs have bargaining advantages vis--vis independent networks because they can determine how many customers a network will reach. The good faith negotiation obligation is thus necessary to protect networks from the unfair bargaining advantages enjoyed by all MVPDs. C. The Limitations Period for Program Carriage Actions Should Begin to Run Only Upon the Reasonable Discovery of a Violation of the Rules. The Commission sought comment on its proposal to revise the program carriage statute of limitations to provide that a complaint must be filed within one year of the act that allegedly violated the program carriage rules.18 The current rule provides that a complaint must be filed within one year of the date on which any of the following occurs: (1) the MVPD and the programmer enter into a contract that allegedly violates the rules, (2) the MVPD offers to carry the programmer pursuant to terms that allegedly violate the rules, and such offer is unrelated to any existing contract between the MVPD and the programmer, or (3) a party notifies the MVPD that it intends to file a complaint based on a violation of the rules.19 The Commission expressed concern that the third prong of the rule could be read to provide that, even if the act alleged to
18 19

NPRM 39. 47 C.F.R. 76.1302(f).

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have violated the program carriage rules occurred many years before the filing of the complaint, the complaint would be timely if filed within one year of a network notifying the defendant MVPD of its intent to file.20 The Joint Commenters support the Commissions efforts to clarify the applicable statute of limitations for filing program carriage complaints and to provide networks with additional certainty about the governing legal standards in program carriage cases, thereby reducing the number of disputes over whether a complaint was timely filed.21 But the Commission cannot and should not accept NCTAs invitation to neutralize Section 616 by precluding claims more than a year after a carriage agreement was signed, even in cases where the discriminatory act happened after that one-year period expired. 22 Such a rule would effectively immunize MVPDs against program carriage claims and permit them to violate the rule with impunity, so long as they waited more than a year after signing a contract to do so. In adopting a rule concerning the statute of limitations, however, the Joint Commenters agree with HDNets suggestion that the Commission should be mindful of networks informational disadvantages in negotiations, which may make[] it difficult for an independent programmer to know, in a timely fashion, if at all, whether it has a timely and meritorious carriage claim.23 Accordingly, the Joint Commenters support MASNs recommendation that the Commission clarify that the limitations period would not begin to run until it becomes reasonably apparent that an MVPD is violating the rules, or has violated them, thereby preventing an MVPD from escaping liability by merely stringing along an unaffiliated
20 21

NPRM 38. See, e.g., The Tennis Channel, Inc. v. Comcast Cable Comm., LLC, Hearing Designation Order & Notice of Opportunity for Hearing for Forfeiture, 25 FCC Rcd 14149 11-16 (MB 2010). 22 See Comments of NCTA at 27-28. 23 Comments of HDNet Entertainment LLC at 4-5.

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programmer until the expiration of the limitations period.24 As MASN properly proposes, the limitations clock should begin to run only upon the reasonable discovery of discrimination or other rule-violating conduct.25 D. Discovery Should Be Streamlined and Administered, At Least Initially, By the Media Bureau. The Joint Commenters initial submission supported a balanced approach to handling program carriage complaints, reflecting some of their own experiences in litigating program carriage cases. It is in part some of this first-hand experience that informed the Joint Commenters positions on the Commissions various discovery proposals.26 With acute knowledge of how burdensome discovery can be for resource-strapped networks, the Joint Commenters maintain that discovery should be tailored and initially supervised, prior to a hearing designation order, by the Media Bureau, which can target information and materials for collection in order to resolve basic questions of law and fact, thereby narrowing the issues for which a hearing is required. In the Joint Commenters experience, evidence establishing a violation of the rules is usually in the hands of the defendant MVPD or its affiliated networks. Discovery is thus an essential mechanism by which complainants can expose information relevant to the allegedly illegal carriage decision, and it would be impossible for the Commission to enforce Section 616 effectively without providing for meaningful inter-party discovery. Accordingly, the discovery obligations proposed by the Joint Commenters, in the form of a Standard Discovery Order,27

24

Comments of TCR Sports Broadcasting Holding, L.L.P., d/b/a Mid-Atlantic Sports Network (MASN) at 21. 25 Id. 26 Joint Independent Programmer Comments II. 27 Id. at 20-23.

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should not be limited to the point of non-utility, as some MVPDs have suggested. For instance, the Commission should reject suggestions that a defendant MVPD be required only to search for and produce documents from its own files but not from the files of its affiliated networks (the very beneficiaries of discriminatory behavior)28 documents that could prove useful in showing the defendant bestows special benefits on its affiliates or in demonstrating competition between the networks at issue.29 Indeed, there is no sensible reason to draw the line suggested between the distribution and content businesses of the same entity where the very point of the governing statute is to test whether the entity is using its power in one business illegally to benefit the other. In sum, the Commission should revise its discovery procedures with an eye toward (1) minimizing fishing expeditions and abuse of the discovery process; (2) facilitating the early resolution of issues by the Media Bureau; (3) ensuring defendant MVPDs are required to produce documents in their custody, control, or possession, including relevant documents from their affiliates, that are essential to demonstrating that the defendant has violated the rules; and (4) curbing MVPDs ability to use discovery as an economic weapon, through which they can leverage their resource advantages to overburden their opponents.

28 29

Comments of Comcast Corp. at 38-39; Comments of DIRECTV, Inc. at 16-18. For example, in the Tennis Channel v. Comcast proceeding, documents collected and produced from the files of Comcasts affiliate Versus demonstrated that Versus had competed directly with the Tennis Channel for programming, suggesting one of Comcasts motives for discrimination. Tennis Channel v. Comcast, Initial Decision, 26.

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E.

Baseball-Style Final Offer Arbitration Should Be Available to Encourage Private Resolution of Disputes. Recognizing the broad support for baseball-style final offer arbitration

including support even from some cable operators30 the Commission should offer a final offer process for resolving disputes. In our initial comments, the Joint Commenters noted that the approach must be voluntary for both sides.31 We underscore here that a voluntary approach adequately balances the benefits of arbitration against the risk of unintended consequences that the procedure could produce. Other programmers have expressed support for mandatory final offer arbitration.32 Our concern, however, is that a mandatory approach fails to account for the possible domino effect on a networks other distribution arrangements due to most favored nations (MFN) clauses present in a number of a networks carriage contracts.33 Accordingly, the Joint

Commenters propose that the adjudicator should have full authority to offer baseball-style arbitration after he or she has concluded that the defendant MVPD violated the program carriage rules, provided that each party have the ability to opt out. And if either party is unwilling to participate, the adjudicator should instead provide for remedial measures in his or her decision measures that would be designed to alleviate the harms imposed on the network by virtue of the MVPDs violation, as established by the factual evidence presented at trial. We note that baseball-style final offer arbitration should be available to the parties on a voluntary basis throughout the course of the proceeding, and even prior to a finding

30 31

See Comments of Comcast Corp. at 79-80; Comments of Cablevision Systems Corp. at 23. Joint Independent Programmer Comments at 32-33. 32 See, e.g., Comments of Bloomberg L.P. at 6-7; Comments of Crown Media Holdings, Inc. at 1314; Comments of MASN at 30-31. 33 See Joint Independent Programmer Comments at 32-33.

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that the defendant MVPD violated the rules. There is significant value in providing parties with the option of using an FCC-facilitated mechanism to reach a private resolution, as opposed to purely private mediation or arbitration, before they invest heavily in litigating their cases. Additionally, the Joint Commenters concur with other commenters that in order for the final offer approach to be effective, the adjudicator must pick one of the two submitted offers.34 As we originally noted, the adjudicator should have flexibility in extraordinary cases to fashion a remedy and reject both offers.35 Such flexibility is important to the integrity of the process, but it is equally important that the Commission emphasize that the adjudicator should exercise this discretion sparingly and only in the rare case in which picking one of the two offers would fundamentally disserve the public interest. In the vast majority of cases, the adjudicator would not be expected to exercise his or her veto power and would be required to pick one of the parties offers. F. The Commissions Proposals Do Not Violate The First Amendment. Members of the distribution industry contend that the Commission lacks authority to adopt the proposed reforms because an expansion of program carriage regulation would impinge on MVPDs First Amendment rights36 a contention that the Commission and the courts have rejected time and time again. Specifically, the MVPD commenters argue program carriage regulation is content-based and should be subject to strict scrutiny,37 but the D.C. Circuit has rejected that view in the context of analogous cable carriage rules. Specifically, the D.C.
34

See, e.g., Comments of Comcast Corp. at 80-81; Comments of Crown Media Holdings, Inc. at 14; Comments of MASN at 31. 35 Joint Independent Programmer Comments at 34. 36 See, e.g., Comments of Cablevision Systems Corp. at 16-20; Comments of Comcast Corp. at 1829; Comments of Time Warner Inc. at 2-4. 37 See, e.g., Comments of Cablevision Systems Corp. at 17; Comments of Comcast Corp. at 21-22; Comments of Time Warner Inc. at 3-4.

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Circuit held that the FCCs leased access provisions do not favor or disfavor speech on the basis of the ideas contained in the speech or the views expressed.38 There, the Court found it significant that independent networks qualification to lease time . . . depends not on the content of their speech, but on their lack of affiliation with the operator.39 And in the program access context, the Commission reaffirmed that program access rules are subject to intermediate scrutiny and that they withstand First Amendment scrutiny under that standard.40 One industry commenter suggests that the leased access and program access rules, on the one hand, and the program carriage rules, on the other, are somehow constitutionally different because the latter is content-based.41 But the program carriage rules prohibit MVPDs from discriminating on the basis of a networks affiliation or ownership, not on the basis of its content. The mere fact that the Commission may consider the extent of competition among networks to determine whether they are similarly situated in the marketplace does not make the program carriage rules content-based. Accordingly, the FCC has held that, like the leased access rules, the program carriage rules would be subject to, and would withstand, intermediate scrutiny.42

38

Time Warner Entm't Co., L.P. v. FCC, 93 F.3d 957, 969, 977-78 (D.C. Cir. 1996). See also Time Warner Entmt Co., L.P. v. United States, 211 F.3d 1313, 1317-18 (D.C. Cir. 2000). 39 Time Warner Entmt Co., L.P. v. FCC, 93 F.3d at 969 (emphasis added). See also Second Report and Order 32 (The program carriage rules, like the leased access requirements, promote diversity in video programming by promoting fair treatment of unaffiliated programming vendors and providing these vendors with an avenue to seek redress of anticompetitive carriage practices of MVPDs.). 40 Verizon Tel. Cos. v. MSG, L.P. and Cablevision Systems Corp., Mem. Op & Order, File No. CSR-8185-P, FCC 11-167 33 (Nov. 10, 2011). 41 See Comments of Comcast Corp. at 21-22, 42. 42 Second Report and Order 32. See also TCR Sports Broad. Holding, L.L.P. d/b/a Mid-Atlantic Sports Network v. Time Warner Cable Inc., Order on Review, 23 FCC Rcd. 15783 49 (MB 2008) (rejecting the argument that a mandatory carriage requirement is subject to strict scrutiny, much less violative of the First Amendment, in part because the program carriage requirements . . . regulate speech based on affiliation, not content).

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As we have shown, nothing in the current regulatory regime constitutes contentbased regulation, and there is absolutely no showing that modification of the rules and procedures applicable to program carriage along the lines proposed would alter that conclusion. Indeed, the Commissions proposals advance[] important governmental interests unrelated to the suppression of free speech and do[] not burden substantially more speech than necessary to further those interests.43 And as the Supreme Court has held in the context of analogous cable carriage rules, expanding the rules to provide for effective enforcement of Section 616 would promote values central to the First Amendment by assuring that the public has access to a multiplicity of information sources.44

Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180, 189 (1997). See also Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 662 (1994). 44 Turner Broad. Sys. v. FCC, 512 U.S. at 663.

43

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CONCLUSION Nearly two decades ago, Congress made a judgment that program carriage regulation was necessary to protect the rights of independent networks. That judgment holds today, as the Commission has concluded time and time again. Yet, the current program carriage regime lacks an effective enforcement mechanism, leaving networks vulnerable to the unfair practices and disproportionate leverage of MVPDs. In its Second Report & Order and in this Notice, the Commission has taken meaningful steps towards correcting these deficiencies. The Joint Commenters commend this effort and encourage the Commission to once again reject the appeals of the distribution industry to retrench or circumscribe program carriage regulation. Section 616 remains important to promoting diversity and fair competition in the video marketplace. It is now time that the Commission create an enforcement regime that fulfills the statute's promise.

Gerard J. Waldron Robert M. Sherman Neema D. Trivedi Stephen A. Weiswasser COVINGTON & BURLING LLP 1201 Pennsylvania Avenue, NW Washington, DC 20004

Counsel to Current TV LLC; NFL Enterprises LLC; and The Tennis Channel, Inc.

January 11,2012

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