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DirecTV Says FCC Arbitration Condition Should Be Unbundled

DirecTV has asked the FCC to unbundle its arbitration condition,
saying that "requiring arbitration of multiple, bundled networks would
significantly increase the complexity and cost of an arbitration proceeding,
and thus would undermine any efforts to streamline the process to make it a
more affordable and expedited remedy for all concerned."

That came in a phone conversation last week between a DirecTV
lawyer and Rick Kaplan, advisor to FCC Chairman Julius Genachowski, according
to a filing at the FCC.

DirecTV was responding to a draft approval of the Comcast/NBCU deal circulated
to commissioners. According to a source, the program access condition
arbitration requirement refers to bundles of service, but DirecTV says if the
FCC does not require unbundling bids in so-called baseball-style
arbitration--where each side submits its best offer--"it is hard to
imagine how an arbitrator would go about determining which party's proposed
terms and conditions for carriage best represented the fair market value of up
to 15 Comcast/NBCU networks at a single time - even assuming that both parties
submitted offers on the same bundle," DirecTV Counsel William Wiltshire
told DirecTV, according to the filing.

He also suggested that allowing bundled bids "would
effectively institutionalize the very sorts of program tying practices that
have raised concerns in other proceedings."

The FCC commissioners are currently vetting the draft, which FCC
Chairman Julius Genachowski supports and circulated, though he has not voted
the item yet.