Arbitrator Benched In Time Warner-MASN Case

Washington – A federally authorized arbitrator who ruled that Time Warner Cable discriminated against Mid-Atlantic Sports Network has been removed from the case, possibly because he discussed the case with reporters subsequent to the release of his ruling.

The American Arbitration Association notified Time Warner Cable and MASN in a Feb. 21 letter that arbitrator Jerome Sussman had been removed “after careful consideration of the parties’ contentions.”

The letter added, “We ask the parties to attempt to mutually agree on a replacement arbitrator from the list submitted to the parties on June 28, 2007, on or before February 28, 2008. Absent the agreement of the parties, the Association will administratively appoint the replacement.”

The AAA’s Time Warner Cable-MASN case manager, Christopher Cole, refused to answer a reporter’s questions Friday about Sussman’s removal. He declined to answer whether the appointment of a new arbitrator would mean an entirely new arbitration or the case would pick up where Sussman had left it, with his Jan. 7 opinion that MASN circulated to reporters on Jan. 21.

MASN controls the pay-TV rights of baseball's Baltimore Orioles and Washington Nationals. Major League Baseball has awarded the North Carolina TV market to MASN

Sussman was removed at a key point in the dispute. In the wake of his ruling, MASN and Time Warner were required to enter “baseball-style” arbitration, which require each party to submit final carriage and license fee terms to the arbitrator. Sussman was to pick one of them unchanged. Both MASN and Time Warner Cable may appeal the arbitrator’s final ruling to the FCC for a completely new review of the dispute.

MASN spokesman Todd Webster suggested Sussman’s removal was non-event because his findings against Time Warner Cable were not disturbed.

“The AAA did not grant Time Warner’s request to vacate the finding of discrimination, but rather, appointed a new arbitrator to determine how to proceed going forward. MASN remains confident that we will prevail and be allowed to return nightly major league baseball to millions of viewers in North Carolina,” Webster said.

Time Warner Cable director of corporate communications Maureen Huff said the cable company filed a motion to disqualify Sussman, but she declined to provide a reason. The AAA’s Cole refused to release Time Warner Cable’s motion.

“We are very pleased with this decision and we continue to believe that we will prevail in the long run on this dispute,” Huff said.

Sussman was unaware of his removal until informed about it by a reporter Friday.

“It’s the first news I’ve gotten about it. I don’t know how that was all done or anything else about it,” Sussman told Multichannel News on Friday. "I haven't had any opportunity to give it any thought, and so I don't have anything to say about it."

In his ruling, Sussman held that Time Warner Cable's offer to distribute MASN just to its North Carolina customers with a digital package was discriminatory and effectively a denial of carriage.

MASN went to arbitration after failing to reach an accord with Time Warner Cable, which serves 1.5 million customers in the Tar Heel state. MASN has a right to take Time Warner Cable to arbitration under conditions the Federal Communications Commission imposed on Time Warner in 2006 when it bought cable operator Adelphia Communications Corp. in a joint effort with Comcast.

Time Warner offered to put MASN on a digital tier, but Sussman said the offer was tantamount to no carriage at all because just 50% of Time Warner's customers were digital-ready. The lack of full distribution, Sussman concluded, could lead to MASN's being "squeezed out of business."

Sussman held that the digital tier offer was also discriminatory because all other RSNs carried by Time Warner in the state, including one owned by Time Warner, were placed on the analog tier.

After his ruling, Sussman explained details of his opinion with several news organizations, including Multichannel News. It's possible that Time Warner sought his removal based on his published remarks.

According to Time Warner, the AAA moved against Sussman for failing to follow AAA guidelines, which state: "[a]ny arbitrator shall be impartial and independent and shall perform his or her duties with diligence and in good faith, and shall be subject to disqualification for (i) partiality or lack of independence, (ii) inability or refusal to perform his or her duties with diligence and in good faith, and (iii) any grounds for disqualification provided by applicable law."