Antitrust Lawyer Blog Commentary on Current Developments

FCC Reiterates Ruling in Adelphia/Time Warner/Comcast Deal

On August 7, the FCC reaffirmed its ruling that Time Warner Cable (“Time Warner”) had to carry the NFL Network for 30 days on systems just acquired from Comcast and Adelphia Communications. On August 4, Time Warner threatened to take the FCC to court if the agency did not back down and allow it to drop NFL Network. Following the release of the FCC's second decision, Time Warner did not commit to a court fight over the need to provide consumers a 30-day notice before deleting a channel. “Time Warner Cable continues to believe that the FCC has misconstrued the notice rules and has ordered a remedy that is in clear violation of the First Amendment. The FCC's action has resulted in exacerbating, not avoiding, consumer confusion,” Time Warner spokesman Mark Harrad said.
Time Warner and NFL Network have never had a carriage agreement, but the network had deals with Comcast and Adelphia systems that Time Warner obtained July 31 when the $16.9 billion Adelphia transaction closed. Time Warner dropped NFL Network on those systems on August 1. Claiming that it gave Time Warner the necessary 30 days to issue the proper consumer notices, NFL Network complained to the FCC within hours that it had been illegally removed by Time Warner. The second FCC ruling was again issued by Media Bureau chief Donna Gregg, an appointee of FCC chairman Kevin Martin. Time Warner may ask the five FCC commissioners to overturn Gregg's rulings as an alternative to an immediate court challenge, which Time Warner said would involve important First Amendment issues.

Time Warner and the NFL have been haggling over terms of carriage, with the network seeking an expanded-basic position but Time Warner hoping to start a sports tier with NFL Network as a key driver of mini-tier penetration. In her 15-page order, Gregg said Time Warner's treatment of NFL Network was “disappointing” because FCC members and outside parties “had expressed serious concern about the impact that the Adelphia transactions would have on unaffiliated programmers.”

For more information contact:

Olev Jaakson at ojaakson@dbmlawgroup.com.