The Federal Communications Commission ruled 3-2 against Comcast today, agreeing with the agency's administrative law judge that the cable giant discriminated against the Tennis Channel.
As a result of the decision, Comcast must move Tennis Channel in 45 days to a tier on par with the tier that carries Comcast-owned Golf Channel and NBC Sports Networks. That could make the Tennis Channel available to an additional 18 million households just in time for the U.S. Open beginning Aug. 27. Comcast must also pay a fine of $375,000.
The decision is a major win for the Santa Monica-based channel, which filed a complaint with the FCC in July 2010 that Comcast used its market power to disadvantage the Tennis Channel by placing it on a premium sports tier. Tennis Channel argued it should be placed on the same tier as Comcast-owned Golf Channel and Versus (now NBC Sports Networks), which are available to significantly more of Comcast's subscribers.
It's also a major win for other independent networks that feel powerless to negotiate with the big pay TV distributors for more favorable channel and tier placement.
"Maintaining free and open marketplaces is what this entire case has been about from the beginning," the Tennis Channel said in a statement. "Comcast inherently enjoys a government-licensed competitive advantage, allowing it to capture consumers for its owned services...Today's decision underscores that Comcast's power comes with a concurrent responsibility to see to it that the freedoms of speech and expression of the diverse programmers that serve these communities are not stifled simply because they compete with networks that the sole cable provider in the marketplace happens to own."
The FCC's unprecedented decision, split along party lines with GOP commissioners Robert McDowell and Ajit Pai dissenting, overrides the carriage agreement Tennis Channel negotiated with Comcast.
Comcast called the FCC's move "excessive regulation" and said it intends to appeal the decision in the federal courts. "The result of this decision is to unfairly expand Tennis Channel's distribution beyond what it negotiated with Comcast," said Kyle McSlarrow, president of Comcast/NBCUniversal in Washington, in a blog post. "The commission's majority substituted its judgment for Comcast's, dictating the tier on which Tennis should be offered to customers. That intrusion into a cable operator's editorial discretion is an unjustified affront to the First Amendment with no legitimates public interest justification."