Cable companies' fight to keep local sports broadcasts out of the hands of some competitors is heating up as satellite and phone companies pressure regulators to take action.
On Friday, satellite TV provider Dish Network said it would file a complaint with the Federal Communications Commission against Comcast for withholding the rights to broadcast regional sports in Philadelphia. Comcast's SportsNet channel owns the rights to broadcast live games for Philadelphia's major sports teams, including the Phillies, Flyers, Sixers, and Eagles.
Dish Network has been in talks with Comcast over the past several weeks to hammer out a deal. But the No. 2 satellite operator said Friday in a statement that talks have reached a stalemate.
"Dish Network has requested access to deliver Comcast SportsNet Philadelphia to our customers," the statement said. "However Comcast has refused to enter into good-faith discussions. Comcast's refusal clearly demonstrates a disturbing pattern of discriminatory behavior."
Comcast argues that it's always made its SportsNet Philadelphia content available to local competitors. In fact, cable competitor RCN and Verizon Communications have access to SportsNet sports feeds. Comcast also makes every one of its other networks, including nine national networks and 13 regional networks, available to all TV providers, including Dish, according to Tim Fitzpatrick, a Comcast spokesman.
The dispute comes down to this: Cable companies are required by federal regulation to offer access to channels that they own to competitors at reasonable rates. But up until recently the regulations only required them to do this for video feeds that are distributed via satellite. Channels that are transmitted locally on terrestrial cable infrastructure, such as local sports, have been exempt. Many people in the industry have referred to this as a loophole in regulation that has allowed cable companies to deny access to these sports channels to TV competitors.
In January, the FCC voted to close this loophole. And as of June 21, cable operators are required to offer local sports feeds at fair rates to competitors.
Dish argues that Comcast is violating this regulation. Dish isn't the only company that is turning to the new regulation in its fight for access to local sports content. AT&T and Verizon Communications have each recently filed supplements to their ongoing complaints against Cablevision to the FCC.
Last year, Verizon and AT&T each filed complaints with the FCC arguing that Cablevision has been withholding a high-definition version of a channel in New York that shows New York Knicks and Rangers games.
In June, Verizon added to its complaintthat as of April of this year, Madison Square Garden is still refusing to allow it to carry high-definition feeds of its sports games.
MSG spokesman Dan Schoenberg said the company complies with federal regulations by providing AT&T and Verizon access to standard-definition broadcasts of games.
"We are pleased to have both Verizon and AT&T as customers and to provide their subscribers with access to every single game on MSG and MSG Plus," he said.
Naturally, neither AT&T nor Verizon see it this way, since sports fans want to watch these games in high-definition. It's clear from a statement FCC Chairman Julius Genachowski made in January that he would like to see competitive TV services get access to all cable-owned content, including local sports in high-definition.
"The loophole gives free reign to cable-TV operators to lock up local sports events and other popular programming and withhold them from rival providers," he said in a statement. "Consumers who want to switch video providers shouldn't have to give up their favorite team in the process. Today the commission levels the competitive playing field."
Up to the FCC to decide
Now, it's up to the FCC to examine these individual complaints and decide whether cable companies are complying with the law and actually negotiating in good faith. The FCC is not yet commenting on the complaints. But insiders say the agency will likely come to a decision on these complaints within five to six months.
Verizon hopes to have to have a decision from the FCC on its complaint by the start of pre-season basketball and hockey, which start in October.
At least one cable operator appears to be giving up its fight to hold on to local sports programming in light of the new regulation. In June, Cox Communications said it hired Fox Networks to negotiate licensing deals with competitors to broadcast Padre baseball games in San Diego County. Cox holds exclusive rights to broadcast these games in the area. No deals have been reached yet, and Padres content is still not available on AT&T's network, a Cox spokesman said.
Last year, AT&T filed a complaint against Cox, claiming the cable company refused to sell it access to San Diego Padres games. AT&T argues that Cox, which competes directly with AT&T in parts of San Diego, has made these games available to another cable operator in the same region that does not compete directly with Cox in this market.
Satellite TV providers and the phone companies say that without access to local sports content, they cannot compete in big markets, such as Philadelphia and New York. But Cablevision says that phone companies, especially, need to stop whining.
"It should be clear by now that whatever problems Verizon and AT&T are having in the marketplace has nothing to do with a lack of HD programming," Kimberly Kerns, a Cablevision spokeswoman said in an e-mail statement. "And the idea that phone companies 10 and 20 times our size need a regulatory bailout is absurd."
Satellite providers cite a 2006 study accepted by the FCC that states that satellite penetration in Philadelphia was 40 percent lower than expected due to exclusion of Comcast's sports programming. Comcast has refuted these figures.
Comcast has also argued that satellite companies offer their own exclusive content that is not available to its subscribers. For example, DirecTV offers the NFL Sunday Ticket package, which broadcasts all NFL games. Dish also offers exclusive programming including exclusive international and foreign programs, such as Portuguese soccer and news from India.
"We remain willing to discuss carriage of Comcast SportsNet Philadelphia with Dish Network," Comcast's Fitzpatrick said. "(But) the FCC's recent Terrestrial Order does not require Comcast to offer Comcast SportsNet Philadelphia or any other terrestrially delivered network to every distributor. It only allows claims where the provider has suffered a competitive injury, and there is no evidence Dish has suffered such an injury."
So what does all this mean for sports fans in big markets such as Philadelphia and New York City? At least for now, they may have to wait a little longer to get full access to their local teams' games on a competitor's TV service.
It could be another six months before the FCC makes its decision in each of these complaints. Even if the FCC rules in favor of Dish, AT&T, or Verizon Communications in each of these complaints, the companies will likely be given about 30 days to negotiate some kind of contract. What's more, the cable companies could also choose to appeal the matter in court, which may further delay access to this sports content.