Comcast Morally Outraged That America Channel Adjusts Business Model to FCC Rules. Cats outraged when mice fight back.

Some of you may recall The America Channel and their efforts to blow the whistle on Comcast’s exercise of market power in the cable programming world. As part of resolution of the Adelphia transaction, the Commission declined to provide any specific relief for The America Channel. They did promise to have a general rulemaking on the carriage complaint process (whereby independent programmers complain that cable operators have illegally discriminated against them) and the leased access process (whereby independents can lease access to the cable system) (a proceeding the Commission announced last month). The Commission also created special protection for regional sports networks (RSNs) so that Comcast could not do unto others as they did unto Mid-Atlantic Sports Network. As part of the FCC’s order approving the Adelphia transaction, a regional sports network can demand carriage on Comcast or Time Warner, and can require that an arbitrator resolve the cost issues.

TAC, seeing that it would get nowhere with its old programming idea, proceeded to reinvent itself as a regional sports network. It has deals with a number of NCAA Division I schools — particularly for the less popular women’s sports, which it will bring to the various regions the schools are in. TAC will pay for the production costs but will not pay for the games themselves, a reversal of the usual royalty agreement I understand. TAC has gotten carriage on cable overbuilder RCN, provided TAC can reach the critical mass of carriage on other providers to achieve viability.

So how’s that working out, and what will the FCC do? More below . . . .

No surprise, because TAC has dared to challenge the cable hegemony, the incumbent cable operators will not return TAC’s phone calls. Hey, it is a matter of principle here! If TAC can get away with complaining about cable market power, other programmers might try that. So TAC must be crushed. And while under the recent Supreme Court decision in Bell Atlantic v. Twombley this sort of “tacit collusion” does not violate the antitrust laws, it still sucks rocks and is highly effective in maintaining market power.

So TAC has fallen back on the condition in the Adelphia Transaction Order to demand that Comcast carry it ad enter into arbitration to settle price. Comcast, in turn has petitioned the FCC to declare that TAC is not an RSN. Since the definition of RSN in the Adelphia Transaction Order is pretty straight forward, you would think that the FCC would move quickly to tell Comcast “yes, we really meant it when we said you have to carry unaffiliated RSNs, now go settle this in arbitration.” If nothing else, you would think the FCC would have an interest in protecting the integrity of its processes or, at least, shielding whistleblowers from reprisals.

Heh heh. Of course not. Instead, Comcast has tried to turn this into a debate about whether it is moral for TAC to reinvent itself into an RSN just so it can get carriage. Now as I mentioned in the context of the RLEC “traffic pumping” dispute, this sort of hypocrisy always steams me more than the usual hypocrisy you find here in the Sausage Factory. Why? Because whenever one of the big boys finds a legal loophole, and little guys or members of the public ask the FCC to close it, the FCC gets all “gosh, we’d love to help, but what can we do? We are trapped by the letter of the law. Oh, if we could stop the abuse by the big incumbents we surely would, but [shrug], what can we do?” Meanwhile, whenever some little shlub finds a loophole to stick it to the big boys, suddenly the FCC is all “Hey, we can’t let someone go exploiting a loophole here and doing something we didn’t intend! That wouldn’t be right!”

And then the FCC wonders why everyone thinks the game is totally rigged…. I keep saying its the Potomac you can see out the window of the FCC conference rooms, not DeNile, but so it goes.

So Comcast’s petition to have TAC declared “not an RSN” because it isn’t moral enough to get carriage remains pending, stalling production for TAC. This, of course, is how most independents that have the nerve to rely on the rule of law end up getting killed. They have only so much money, and can only hold out so long. Meanwhile, the incumbents can keep bringing up delay, after delay after delay, while the Commission frumps around trying to actually make a decision about something.

To further confuse the issue, Comcast brings in a parade of its pet “independent” channels (especially the ones devoted to women or “minority” programming) and has them call up the Commission “voluntarily” to explain that if the Commission sides for the evil and unworthy TAC, the noble (and did we add minority programming) Africa Channel will get shoved off systems because of capacity issues. *sniff* *sniff*. [Look up at Democrats with little puppy dog eyes.]

Given what happens to channels like the America Channel that refuse to play ball, it is small wonder that the “independent” channels invariably dance to the Cocmast/Time Warner tune. Heck, in the telecom world, the equipment manufacturers always side with the telcos. It’s about survival. Objectively however, the idea of channel capacity issues is a crock. Especially with the new digital channel pairing technology that allows cable to increase capacity enormously, the notion that the Commission must choose between the channels already on the system and TAC is absurd. Even if there were some truth, I see no reason why Comcast should be able to blackmail the Commission by threating to minority programming like some bully threatening to throw a bag of adorable puppies over the side of a bridge. It will help everyone in the long run (IMO) if the Commission acts decisively to break cable market power by enforcing its rules and protecting whistleblowers rather than wussing out every time and teaching independents that the Commission will never enforce its own rules against big Cable.

So, since this has dragged on for freakin’ ever I am taking a break from the 700 MHz proceeding to urge the Commission to get a life and decide the damn thing already. Oh, and if the Commission is going to engage in some public interest balancing rather than just apply its own rules, it should consider both that TAC is providing important women’s sports programming and that the FCC needs to protect the integrity of its processes and stop letting big Cable make an example of anyone who comes forward. God knows Comcast was quick to exploit the “terrestrial loophole” that allows it to avoid the program access rules and keep needed sports programming out of the hands of rivals. Now Comcast is “Shocked, shocked I tell you” to see TAC try to leverage Commission rules to get on its systems? C’mon……

It is bad enough when the law, in its equality, forbids both rich and poor from sleeping under bridges. But it is unforgivable when poor people sleeping under bridges do time and rich people found sleeping under bridges get driven home. The FCC should enforce the rules it wrote for all, or just admit that its rules are a joke.

Stay tuned . . . .