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Court Agrees: Cost Is Defense for Non-Carriage

Washington — A federal appeals court agreed last week
that programming costs are a defensible reason for a cable
operator to treat a regional sports network differently
than its own, co-owned service.

The 4th U.S. Circuit Court of Appeals denied Mid-Atlantic
Sports Network’s appeal of a Federal Communications Commission
decision that Time Warner Cable had not discriminated
against it when it declined to carry MASN — and its
Washington Nationals and Baltimore Orioles Major League
Baseball games — on an analog tier in North Carolina.

MASN asked for a remand, saying the FCC had been arbitrary
and capricious in ruling in TWC’s favor. But the court
sided with the FCC, ruling the agency found “legitimate and
nondiscriminatory reasons” for the MSO’s decision, including
price and “legitimate business practices common to a competitive

“The FCC concluded that the ‘high cost of carriage’ of Mid-
Atlantic Sports Network was a ‘legitimate and non-discriminatory’
reason for its refusal to carry Mid-Atlantic Sports
Network on a statewide analog tier,” said the court, which
deferred to the FCC’s expertise in making that call.

MASN appealed after the full FCC in 2010 reversed a
then two-year-old, bureau-level decision upholding an
outside arbiter’s conclusion that TWC had discriminated.
The 4th Circuit concluded that even if MASN had made a
prima facie case for discrimination, it had not demonstrated
why TWC had not effectively rebutted that case with evidence
supporting its legitimate business reasons.

Cable operators are not prevented from treating independent
programming networks differently from channels
in which they hold an ownership stake — in other words.
discriminating between them. They just have to have a reason
other than unreasonably restraining the ability of unaffiliated programming vendors to compete for channel
space, as prohibited by FCC program-carriage rules.

“We’re disappointed by the Fourth Circuit’s decision,
which upholds the FCC’s order reversing the decisions
of two independent arbitrators and the FCC’s Media Bureau
that had ruled in MASN’s favor,” MASN said. “We
will continue to explore ways to bring our exciting lineup
of live sports action to Time Warner Cable’s subscribers
in North Carolina. Viewers in North Carolina who want
to watch MASN’s programming can find it on DirecTV,
Dish, Charter, Mediacom, M I Connection, Tri-County
Cable, Randolph TV, Sky Best, Fibrant, Reds Cable and
Salem TV.”