Washington -- Comcast’s refusal to give broad distribution to the NFL Network is designed to ensure that only die-hard pigskin fans shoulder the network’s 150% minimum rate hike sought for adding eight pro football games to the pay-TV channel's fall schedule, the cable company told the Federal Communications Commission on Monday.
“Comcast prefers to provide the new high-priced NFL Network to those customers who want it without imposing the additional costs on everyone else, and Comcast has done so – in accordance with the contract to which the NFL agreed,” Comcast explained in a Nov. 6 FCC filing.
Comcast is the largest U.S. cable TV provider, with 24.2 million customers. The NFL Network’s per month, per subscriber license fee demand jumped from the 20-25 cent range to the 50-75 cent range in 2006 when the league decided to air eight games on Thursdays and Saturdays on its own cable network.
To maximum license fee and advertising income, the NFL Network has been pressuring Comcast and Time Warner Cable to put the channel on a tier that all, or substantially all, subscribers purchase.
In September, the NFL Network asked the FCC to force Comcast to bargain in good faith or face compulsory arbitration initiated by the programmer. The NFL Network claims that pro football’s broad national popularity justifies access to nearly all cable homes.
Comcast said in the FCC filing that the NFL Network’s forced arbitration proposal would require FCC intervention before a violation of federal program carriage laws had been demonstrated.
“The [FCC] has no discretion to interpret the statute in this way,” Comcast said.
Comcast also stated the NFL Network was effectively asking the FCC to use its authority illegally to force Comcast to swallow the network’s license fee demands over any objections Comcast might have. Comcast said the Hallmark Channel was guilty of the same maneuver.
“Both the NFL Network and the Hallmark Channel want the FCC to directly intervene in the carriage decisions of [pay-TV distributors], without proof of statutory violation, and force those distributors to carry programming on terms and conditions set by the government,” Comcast said. “Congress did not create a `must carry/must pay' rule for networks.”
Hallmark, seen in about 85 million homes, receives about 3 cents per month per subscriber from its cable and satellite affiliates. Hallmark’s carriage deals with Comcast, Time Warner and DirecTV expire in December. Although it has not disclosed its new license fee request, Hallmark told the FCC that it gets better ratings than Comcast-owned Golf Channel, which has a 23-cent license fee.
Comcast said the Hallmark Channel shouldn’t be allowed to rely on the FCC for help simply because the network had decided on its own to abandon its low-license-fee business model.
“Launched in August 2001, Hallmark Channel rapidly gained distribution to over 82 million homes, in large part because it enticed [cable and satellite providers] to carry it by charging low license fees,” Comcast said. “Now, as it renegotiates its carriage agreements, Hallmark Channel asks the government to put its thumb on the scales so that it can obtain higher fees, -- which would inevitably increase consumer prices for cable and satellite service.”
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