Two small cable system operators on the West Coast have filed a complaint with the Federal Communications Commission against Comcast Cable, charging that the way the country’s largest MSO is handling its sports networks in the area is anticompetitive.
The complaint is inopportune for Comcast. The company is in the process of buying NBC Universal; those opposed to the merger fear the combined company could abuse its power as both owner and distributor of content. Opponents to the merger will no doubt point to this lawsuit as evidence that their fears are far from unfounded.
The complaint explains that Comcast combined its Sacramento, Calif., and Bay Area sports networks and reassigned games from one to the other. Specifically, it reassigned the NHL San Jose Sharks and MLB Oakland Athletics, both in the San Francisco market (and corresponding Comcast sports network) to its Sacramento network.
The complaint states that in order to carry local sports programs, operators that compete with Comcast are now compelled to sign two RSNs instead of one. That unfairly forces an increase in expenditures, but then on top of that, the complaint says, Comcast increased the charges for the combined sports network package “without any significant increase in major league sports programming.”
“We have increased the value of these networks by substantially raising the amount of relevant local sports coverage we provide and will reply to the FCC in due order.”
Comcast had the Sacramento-region sports network and bought the Bay Area sports network from Cablevision in 2007. Comcast reassigned programming – and teams – from one to the other, ostensibly to reduce scheduling contention. For example, the Bay Area network had both the A’s and San Francisco Giants, and with the extension of major league seasons, schedules would also conflict with the Sharks and NBA Golden State Warriors. The company also began offering local, in-studio sports coverage on the Bay Area network.
That may be so, but according to the petitioners – WaveDivision Holdings, Horizon CableTV, Stanford University and the city of San Bruno – the issue isn’t availability, but how that availability has affected pricing.
The four say that Comcast SportsNet “has discriminated in the prices, terms and conditions of sale and delivery of the CSN programming; Comcast, and the Comcast-affiliated systems, have unduly or improperly influenced the CSNs’ prices, terms and conditions for the sale of their programming to petitioners, all in an effort to unfairly compete for cable subscribers and reduce the market share held by petitioners in the San Francisco and Sacramento DMAs.”
Wave operates systems in both markets, the others largely in San Francisco and nearby areas.
Wave and Horizon are both American Cable Association members. Further, Wave COO Steve Friedman is the ACA’s board chairman. The ACA has been urging federal regulators to make sure a combined Comcast-NBC will not be able to abuse whatever market power it will gain through the combination since the deal was announced.
The ACA issued the following statement, attributed to ACA President and CEO Matthew Polka: “The complaint highlights the need for additional safeguards and remedies to prevent Comcast Corp. from abusing its market power to harm consumers, competitors and the public interest in the distribution of `must-have' regional sports networks under its control. Regulators must be certain that if Comcast takes control of NBC Universal, it can't engage in unfair methods of competition and deceptive practices when competitors seek access to NBC broadcast signals, Comcast-NBCU national cable networks and various Internet-content services, such as live streaming of the Olympics.”