For years a number of programmers have complained that their requests for carriage have not been treated fairly by a number of large cable operators. Now those complaints have been referred to an Administrative Law Judge (ALJ), who has been charged with the task of “resolv[ing] the factual disputes” and recommending some resolution of the dispute within 60 days.
While the precise issues to be resolved by the ALJ are not laid out with specificity in the “Memorandum Opinion and Hearing Designation Order” (HDO) issued by the Media Bureau, the HDO includes considerable discussion of allegations that cable systems owned by Comcast, Time-Warner, and Cox discriminated in favor of program services in which they own an interest against Wealth TV, the NFL Network, and MASN (a mid-Atlantic baseball network). Discrimination in favor of cable-owned program services is not permitted.
Wealth TV made a prima facie showing, sufficient to warrant a hearing, that MOJO, a programming service in which the cable operators have an interest that has similar content and aims at a similar demographic, was given nationwide distribution when all Wealth TV could get was a so-called "hunting license" to negotiate with individual cable systems. On the sports side, the NFL Network and MASN made a case that the cable companies treat sports channels in which they have an interest better in terms of tier selection. The FCC also raised an eyebrow about the charge that the cable companies asked for licensing fees from the sports channels, as demanding an equity interest in programming in return for carriage is forbidden.
There are some interesting aspects of the HDO, which was released late Friday evening, October 10. While there will be no conclusive findings until the hearing ends and the cases are ultimately decided, the HDO does appear to recognize that cable has enough of a “monopoly” that access may be necessary for a program service to survive and that a program service can suffer legally cognizable damages if it does not get cable carriage. Cable arguments regarding their limited capacity were not given much attention.
The HDO specifies that the ALJ will resolve all disputes within 60 days of the release of the HDO, which would require resolution by December 9 and would appear to require the parties to give up Hallowe’en trick-or-treating and Thanksgiving turkey dinner. Normally, even the simplest, most streamlined hearing-type proceedings take a year or more to complete, by the time issues are identified and sharpened, depositions and document production take place, witnesses are examined, and findings and briefs are filed, let alone the time the Judge needs to write a decision. In view of the Big Names involved in this proceeding, it is hard to imagine that the parties will not take advantage of each and every procedural opportunity afforded to them by the rules, in which case the 60-day deadline might be missing an extra zero.
The 60-day time clock could also be unplugged if the parties elect to use Alternative Dispute Resolution (ADR). ADR would suspend the 60-day clock, which would start again on notice by the parties that the ADR process has failed. The HDO does not impose any time limitation for such notice.
A lot of potential cable programmers, including both cable networks and Class A/LPTV stations that do not have must-carry rights, will be watching this case with what might be termed “extreme interest. ”