A federal appeals court in Washington today appeared poised to strike down a Federal Communications Commission decision that found the country's largest cable television provider discriminated against the Tennis Channel by restricting its distribution to a sports package.
A lawyer for the commission, Peter Karanjia, faced tough questions from a panel of the U.S. Court of Appeals for the D.C. Circuit, where Comcast Cable Communications LLC is fighting the FCC order. The agency ruling was the first-ever in two decades under a provision of federal communications law that Congress enacted to promote competition and diversity in cable television programming.
Judges on the D.C. Circuit panel expressed concern about whether the Tennis Channel's complaint is time-barred and whether the agency order could expand the power of the government to regulate the speech of other entities. One judge, Brett Kavanaugh, said the FCC "has a serious problem with the First Amendment here."
The appeals court didn't immediately rule in the closely watched case. Bloomberg L.P. filed papers in support of the FCC. On the other side, the National Cable & Telecommunications Association wants the FCC order vacated. A team from Gibson, Dunn & Crutcher represents Comcast.
The FCC order, issued by a divided commission in 2012, said Comcast must provide equal treatment to the Tennis Channel as the cable provider gives to two affiliated sports networks, the Golf Channel and Versus, which is now NBC Sports. The FCC also fined Comcast $375,000.
The Tennis Channel, represented by Covington & Burling in the appeal, has no ownership affiliation with Comcast. The cable provider contends its distribution decision stems from a cost-benefit assessment. Karanjia of the FCC noted in court that the commission decision requires the same level of distribution for the three networks but Comcast has full discretion to determine how it chooses to carry those channels.
Senior Judge Harry Edwards of the D.C. Circuit appeared ready to strike the FCC order on the ground that the Tennis Channel discrimination complaint was filed outside the one-year FCC window in which to challenge carriage. Edwards based his view on language in an agency rule in 1994.
Edwards questioned whether the fight in the appeals court is "entirely unnecessary." Comcast and the Tennis Channel entered a carriage contract in 2005. FCC lawyers said in court papers that the limiting language was deleted from the rule 18 years ago.
"You just glibly say, oh, that's a thing that happened 18 years ago," Edwards said, addressing Karanjia, deputy general counsel at the FCC. "The thing 18 years ago is still in play." Edward said later that "the contract becomes silly; it has no meaning" if networks can bring stale claims at any point circumstances change.
Covington & Burling partner Robert Long Jr., arguing for The Tennis Channel, said in court today that the sports network filed a timely challenge in January 2010 of Comcast's decision, in the previous year, not to broaden the distribution of the channel. The Tennis Channel sought wider distribution based on what it said was viewership growth and programming improvements, including high-definition capability.
Long said a conclusion in the D.C. Circuit that the one-year limit is in place would create a "huge loophole" to the benefit of Comcast.
“If Comcast's interpretation were accepted, [multi-channel video programming distributors] could wait for a year after a contract is signed and then discriminate with impunity," Long, who chairs Covington’s appellate and Supreme Court litigation group, wrote in court papers.
Arguing for Comcast, Miguel Estrada today called the FCC order "one of the most outrageous invasions of the First Amendment since the Sedition Act." Estrada said at another point that the FCC ruling marked a “direct invasion of the editorial function.”
Estrada, co-chair of Gibson, Dunn & Crutcher's appellate and constitutional law practice, said there was no evidence that Comcast stood to benefit financially from broadening the distribution of The Tennis Channel, which comes in a sports and entertainment package that costs subscribers $5 to $8 more monthly. (The Golf Channel and Versus are more widely available to Comcast subscribers on basic and digital tiers.)
Estrada crafted a hypothetical comparison in which federal regulators questioned why The New York Times was not giving front-page access to a freelance reporter whose copy was being relegated to "next to the used car ads." The Tennis Channel, Estrada said, comparing the network to the freelance reporter, did not prove itself worthy for front-page attention.
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