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Both Sides Now

The FCC saw both the pros and cons of dealing with the D.C. federal appeals court last week. Cable operators, however, were happy with both outcomes.

The commission got hammered by a three-judge panel over its program carriage complaint decision in the Tennis Channel case. But the court showed the agency a little love on its pole attachment decision, upholding it against a challenge from utility companies.

While that was a good news/bad news scenario for the FCC, it was only good news for cable operators. A win in the Tennis Channel case would be a victory for Comcast, the nation’s top cable operator; meanwhile, the pole attachment decision eases their deployment of a new plant.

Between the serious First Amendment issues with the FCC’s carriage remedy expressed by Judge Brett Kavanaugh and the contract issues on which Judge Harry Edwards focused, the FCC appeared to have an uphill fight to keep its Tennis Channel decision from being remanded back.

In a 3-2 party line vote, the FCC last July upheld a judge’s ruling that Comcast discriminated against Tennis Channel by carrying it in a sports tier while carrying its co-owned Golf Channel and Versus (now NBC Sports Network) on a more widely viewed basic tier. Comcast appealed the decision to the FCC, then the court.

The FCC remedy was to provide Tennis Channel with the same level of distribution—whether that be basic or sports tier, or not carrying it at all—that it provided its co-owned channels.

Judges Kavanaugh and Edwards were joined by Judge Stephen Williams on the panel, but the former two asked most of the questions. Since judges often play devil’s advocate, it is hard to predict how they might come down on this case. However, given that this is a conservative panel regarded as tough on the FCC, it may be a bit easier than usual to forecast.

The FCC argued that cable did not still have to have bottleneck control of a multichannel video programming distributor market for the anti-discrimination provision of the Cable Act to still hold sway, but that if the court found that a showing of bottleneck control was necessary, the court should give it a chance to prove that.

And the FCC could get its wish. Court watchers last week were expecting the judges to vacate the decision and remand it back to the FCC to demonstrate that Comcast’s move was anticompetitive.

But it was not all coal and switches for the commission. The same court found that the FCC had justified its decision to revise the pricing of pole attachments and putting a shot clock on localities for decisions.