Decision on Sportsnet Philadelphia Due this Week

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Program Access on FCC Agenda

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By Ted Hearn 10/30/2006 5:03:00 PMThe Federal Communications Commission is making plans to review its program-access rules, which generally require cable operators to sell their satellite-delivered networks to DirecTV, EchoStar Communications and other pay TV providers, an agency official said Monday.

The FCC last looked at the rules in 2002, one decade after program-access provisions were enacted as part of the Cable Television Consumer Protection and Competition Act of 1992. Congress imposed forced-sale mandates on cable to ensure that the satellite-TV providers could gain access to cable channels that were too expensive for new entrants to duplicate.

Four years ago, the FCC examined the cable-programming market and concluded that it would not use its discretion to allow the cable-exclusivity ban to sunset. Instead, the commission extended the ban until October 2007, setting up the review it has nearing the launch pad.

The program-access regime has expanded beyond the original congressional design as a result of FCC-imposed merger conditions. Comcast and Time Warner Cable can't withhold terrestrially delivered regional sports networks from rivals for the next six years under Adelphia Communications merger conditions adopted in July. However, Comcast did manage to secure a waiver for SportsNet Philadelphia.

And News Corp., in order to take control of DirecTV in 2003, promised to make its cable-programming services available on a nonexclusive basis for as long as the FCC's program-access rules remain in effect.

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Verizon set to take on ComcastIts TV service, with SportsNet, starts Monday.
By Miriam Hill
Inquirer Staff Writer
Comcast Corp., which has been snatching Philadelphia-area phone customers from Verizon Communications Inc. for more than a year, is about to get a big taste of its own medicine.

Verizon is expected to announce tomorrow that it will start selling its new $18 billion fiber-optic TV service this week to 100,000 homes in the area, including Bucks, Delaware, Chester and Montgomery Counties as well as in South Jersey, according to sources at both companies. The service will not yet be offered in Philadelphia.

Surprisingly, Verizon will offer the channel that has kept thousands of area customers from abandoning Comcast in favor of one of the satellite systems: Comcast SportsNet, with the Phillies, Flyers and Sixers games it carries exclusively.

Neither company would comment for this story, but the SportsNet agreement comes as something of an eyebrow raiser. DirecTV and the Dish Network, both satellite providers, unsuccessfully lobbied Congress and the Federal Communications Commission for years to force Comcast to share its sports programming in Philadelphia.

Verizon is expected to charge $117.93 monthly for its combined phone, high-speed Internet and FiOS TV package in the Philadelphia area. Comcast charges $99 for a similar package, but that rate is available only for one year to new customers. The company has not said what it will charge after the introductory period, but the three products, if purchased separately, cost about $130.

It may be some time before the competition between the two telecommunications giants has a noticeable effect on prices. Indeed, the service bundles for television alone can be so complicated that they defy useful comparison.

In one Maryland community where Verizon and Comcast have locked horns, consumers have reported that they've been able to negotiate with sales representatives for free add-on services such as the premium movie channel Cinemax. Others make their decision based on their experience with each company's reliability and customer service.

Battle for market share

Philadelphia-based Comcast has won about 1.3 million phone customers in the last year, 80 percent of whom buy a triple-play package of phone, high-speed internet and cable TV service.

Verizon has fought back with a triple-play product of its own, but it includes satellite television, which in Philadelphia means no Phillies, Flyers or Sixers games. With its new FiOS TV product, which is similar to cable, as part of its lineup, Verizon should be able to compete more effectively.

It is not clear why Comcast agreed to share SportsNet with Verizon. As part of this deal, Verizon also agreed to carry three other Comcast channels: PBS Kids Sprout, the Golf Channel and VS., the sports network formerly known as OLN. That gives Comcast a broader audience for its content, potentially allowing it to charge more for ads.

Because of an exemption in federal law, Comcast does not have to share its local content such as SportsNet with competitors.

But while Comcast has kept sports content from satellite competitors, it has shared it with RCN Corp., a cable company with a small number of customers in the Philadelphia suburbs.

Hearing planned

Comcast's decision comes on the eve of a hearing this week by Sen. Arlen Specter that will focus on whether cable companies kill competition by hoarding sports programming.

Comcast also may use local sports programming as a bargaining chip in its bigger battle with the NFL Network. The company has balked at prices the NFL wants to charge for some games, resulting in litigation. Company executives also have complained that it cannot buy NFL Sunday Ticket, a popular package of football games available only to DirecTV subscribers.

Verizon's ability to offer local sports undoubtedly will thrill Philadelphia sports fans, but executives at DirecTV were fuming.

"Comcast continues to deny tens of thousands of DirecTV customers and loyal Philadelphia sports fans access to their home teams while providing their regional sports network to a small cable service and now Verizon, which has yet to sign up a single customer," said Susan Eid, DirecTV's vice president of government relations.

"All they've done is added insult to injury by continuing their anticompetitive behavior and shamelessly demonstrating their disregard for Philadelphia's sport fans."

Satellite companies' inability to get Philadelphia sports programming has hurt DirecTV and the Dish Network here, she said. The two companies have less than 10 percent of the Philadelphia market, compared with 26 percent nationally.

Verizon has agreements with 94 municipalities in Southeastern Pennsylvania to offer FiOS TV. It does not yet have such an agreement with Philadelphia.

Verizon can offer FiOS statewide in New Jersey. Verizon will roll out the service gradually. It is expected to announce which municipalities will get the service first tomorrow.

[SunMo]

get Verizon!

[rjs246]

TV sucks!

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Specter says NFL abuses cable viewersBy Miriam Hill
Inquirer Staff Writer
WASHINGTON - Sen. Arlen Specter's hearing yesterday was supposed to focus on whether cable companies such as Comcast Corp. can wield sports programming like a club to inhibit competition.

But at the end of the Senate Judiciary Committee hearing, Specter turned the tables in a way that took a lot of heat off Comcast. The Pennsylvania Republican, who is chairman of the committee, said he would sponsor legislation to eliminate the antitrust exemption that allows the National Football League to negotiate broadcast rights for all of its 32 teams.

Specter cited a list of grievances against the NFL, including its decision to move Monday Night Football from ABC to ESPN, a cable channel, and moves by teams such as the Colts from Baltimore to Indianapolis.

That history represented a philosophy of "fans be damned," he said. The programming changes suggest an attitude of "consumers be damned."

"Wouldn't consumers be better off if teams could negotiate?" Specter asked. "This is the NFL exerting its power right down to the last nickel."

In a written statement, the NFL said it was sensitive to Specter's concerns, but added that there was no basis for repealing its antitrust exemption. The league also defended its television practices as "consistent with the public interest and as delivering fans extraordinary amounts of programming at little or no cost."

The NFL Network is suing Comcast over the Philadelphia cable company's refusal to carry eight late-season football games in a programming tier widely available to customers. Comcast wants to put those games in its sports tier, which costs $5 more monthly, to compensate for higher fees the NFL wants to charge.
Comcast also has complained that it cannot buy rights to NFL Sunday Ticket, a popular package of games available only to DirecTV subscribers.

Comcast executive vice president David L. Cohen, who also testified yesterday, said he was not ready to agree that the NFL should lose its antitrust exemption.

It is not clear whether Specter's proposed legislation will go anywhere. When Democrats take control of the Senate in January, Sen. Patrick Leahy (D., Vt.) will replace Specter as committee chairman.

Specter said he would consider proposing that Comcast and other cable companies no longer be allowed to refuse to share sports programming with satellite competitors.

He said he was pleased to see that Comcast had agreed to sell its SportsNet content, which includes Phillies, Flyers and Sixers games, to Verizon Communications Inc. Verizon has started selling TV service in the Philadelphia region.

Cohen said his company agreed to share that content in part because it did not think Verizon would compete with Comcast in the city of Philadelphia.     He also cited DirecTV's exclusive rights to NFL Sunday ticket.