Sports fans in Portland without Comcast may have had it tough for the last few seasons, but sports fans in Philadelphia have had to endure more than 10 years of Comcast flexing its muscles in the local market. Not only does Comcast own Comcast SportsNet Philadelphia, a regional sports network that carries three of the four major teams in town, it also owns two of those teams - the Flyers and the 76ers.
This means that Philly fans can't watch their local teams on DirecTV or DISH Network. Unless they can afford to pay for both Comcast and DirecTV, sports fans in Philadelphia who want to watch DirecTV's NFL Sunday Ticket so they can see all the NFL games must sacrifice watching Philly teams. As a result, satellite TV providers reportedly only have an estimated 16% share of the Philadelphia market, half of what they have in other markets.
Meanwhile, sports fans in New York have had to endure not just James Dolan's mismanagement of their beloved Knicks franchise, they've also been victims of his strong-arm tactics as President and CEO of Cablevision and Madison Square Garden, Inc. Dolan and Cablevision have withheld MSG Sports programming in HD from New York fans who want to use some other carriers, including Verizon and DISH. And any true sports fan can tell you it's infuriating to watch a sports game without HD.
Comcast and Cablevision have been exploiting a loophole in the law to prevent its competitors from carrying their respective regional sports networks. Here's how the AP explains the "terrestrial loophole:"
While content owners generally cannot stop competitors from getting access to its channels, there has been an exception since 1992. If the channel's signals travel through a land-based network instead of satellite, the owner of that channel doesn't have to give every rival access. The purpose of the exception was to encourage development of local programming.Comcast and Cablevision Systems Corp. have counted on that loophole to block access to some of their sports channels by their satellite TV and phone company rivals.
But in January of this year, the FCC closed the loophole (and in March a federal appeals court upheld the decision). Here's what FCC chairman Julius Genachowski said at the time:
The loophole gives free reign to cable-TV operators to lock up local sports events and other popular programming and withhold them from rival providers ... Consumers who want to switch video providers shouldn't have to give up their favorite team in the process. Today the commission levels the competitive playing field.
To most observers, the FCC's ruling meant that Comcast now has to offer CSN Philadelphia to its competitors and Cablevision has to offer MSG in HD. Not that that's happening anytime soon. Both have refused to follow the FCC's ruling.
DISH Network wrote to Comcast in June requesting to carry CSN Philly and received what it said was an outright refusal from Comcast two days later. DISH subsequently announced plans to file a complaint with the FCC.
Comcast spokesman Tim Fitzpatrick said in a statement:
The FCC's recent Terrestrial Order does not require Comcast to offer Comcast SportsNet Philadelphia or any other terrestrially delivered network to every distributor. It only allows claims where the provider has suffered a competitive injury, and there is no evidence Dish has suffered such an injury.
Comcast says it will give the rights to CSN Philadelphia if DISH and DirecTV give up the rights to their exclusive content, namely DirecTV's NFL Sunday Ticket. But there's quite a difference between not allowing other carriers to show in-market games and withholding out-of-market games.
So for the time being, sports fans will continue to have to choose between watching their teams and satellite service, a choice that, as Genachowski emphasized, no sports fan should have to make.
If the situations in Philadelphia, New York and Portland don't make sports fans wary of the pending Comcast-NBCU merger, they should. Comcast has used its control over two regional sports networks to withhold sports programming from competitors, thus treading all over consumers. Imagine what it could do with a national broadcast network.
Brian Frederick is the Executive Director of Sports Fans Coalition. He holds a Ph.D. in Communication and lives in Washington, D.C. His favorite teams are the Kansas Jayhawks, North Carolina Tar Heels, and whichever team his brother is coaching for. And the underdog. Email him at sportsfanscoalition@gmail.com
Follow Brian Frederick on Twitter: www.twitter.com/brifred
Trying again...
FMcQ, you are incorrect in every aspect of your argument.
1) Team ownership is irrelevant under law. Only network ownership is relevant under law -- but not to consumers!
2) Team ownership is irrelevant to consumers. Cable companies don't own the Phillies, Padres, Islanders or Sabres, but all have/had identical issues as cable-owned teams. Consumers are equally unhappy about them.
3) The NFL does want to maximize their price, which is precisely why it sells Sunday Ticket to DirecTV as an exclusive (for 21 years now!) -- at the expense of consumer choice! DirecTV pays the NFL more than consumers pay DirecTV -- it's a loss leader -- precisely because it brings in subscribers for other services. No different from Comcast and CSN! In both cases, an economic benefit is derived from an exclusive. The only difference is the benefit from ST is split between DirecTV and the NFL, while the benefit from CSN ends up in one parent (Comcast).
These cases are identical -- economic benefit to companies for sports exclusives, at the expense of choice for consumers.
There are exactly two consistent and coherent positions: a) it should be acceptable for both DirecTV and Comcast to hold pro sports exclusives, and b) it should be unacceptable for either to hold such exclusives.
Anybody arguing that such should be acceptable for one, but not the other, is expressing only their own bias -- not
First, NFL Sunday ticket is OWNED by the NFL, not DirecTV, which potentially leaves the product open to alternate bids when the contract period is up.
But in Philadelphia, on the other hand, Comcast SportNet's STRANGLEHOLD on local sports programming is NEVER open to a competitive bid process because Comcast owns the TEAMS (Flyers and Sixers), as well as the NETWORK that airs them. This predatory monopolistic practice by Comcast gives them PERPETUAL EXCLUSIVE rights to LOCAL (in-market) sports programming for two Philly teams.
DirecTV's deal with NFL Sunday Ticket gives them exclusive rights to sell OUT-OF-MARKET games for a defined contract period (not perpetually). But that right and its exclusivity are subject to change via the competitive bid process. The NFL has a business interest in selling its package to the highest (or most favorable) bidder, while Comcast maintains its competitive advantage through AVOIDING the bid process via its vertical monopoly.
So there is simply no valid comparison between the two business models.
I presume that your view comes from lack of familiarity. So a few specific points:
1) Consumers don't care why they can't get the programming they want. They care only that they can't get it.
2) DirecTV has held/holds the exclusive on Sunday Ticket for 21 years -- more than two decades. Longer than any cable operator has owned any team. Just how many decades does exclusive control need to be before you conclude it is indistinguishable from ownership?
3) Absent government intervention, there's absolutely no reason to expect there will be any change to the Sunday Ticket status quo. It has never been offered on terms that made it possible for any single cable operator to compete for it. The terms have always, at least, required all cable operators to act in concert to compete, and at worst, made it impossible for them to compete.
The NFL wants a guaranteed flat-rate fee, not a per subscriber fee. For those terms, whoever can market to the most homes wins. The largest cable operator, Comcast, has about 50M homes passed. DirecTV probably reaches some 90M homes.
Sunday Ticket is a loss leader for DirecTV. There can only be one reason for paying so much -- it gets them subscribers for other services they wouldn't otherwise get. You can wave your hands all you want, but that's indistinguishable from Comcast and CSN.
"Members of the Federal Communications Commission voted four-to-one Wednesday to eliminate a loophole that has allowed Comcast Corp. to keep Comcast SportsNet in Philadelphia from satellite television providers." I find it incredible that they have the nerve to ignore the FCC's ruling when on the same hand, they are trying to merge with NBC. The main concern of the merger opponents is having access to channels/events and the possibility of Comcast making them exclusive to NBC/comcast. Comcast swears that they would never do that. Don't you think it is a little ironic that here we are, on a much smaller scale, and they are with holding programing.
Also, Comcast other argument is that DTV/Dish must proove that they have been negatively affected due to the with holding of a channel. Are they really trying to say that the Satelites have not been affected by this? We are talking about 400,000 people compared to the percentage of other major metro areas in the country. Really?
I am guessing you work for Comcast, as it really makes no sense for anyone else to be on Comcast's side on this issue. The customer is the big loser here. I hope the merger goes through and they force CSN to be shared so that we have a choice. It that to much to ask for? BTW, last time I checked, the Eagles are on Comcast every week.
First, because the FCC believes that allowing some exclusive content is actually beneficial to competition and consumer-friendly (which is precisely why _Congress_ created the so-called "terrestrial loophole" in the first place), the FCC didn't want to ban all local exclusives.
Secondly, because Congress did explicitly place a terrestrial exception in the statute, the FCC had to stand on its head to try to justify the new rule under prohibitions on unfair competition.
So the rule simply enables competitors to file complaints that a cable exclusive constitutes unfair competition, and has harmed them. The FCC then needs to make a fact-specific finding of such competitive harm.
No such ruling has happened yet. And I'm telling you, given that the statute explicitly creates the terrestrial exception, and given that the Sunday Ticket exclusive isn't deemed unfair competition, any reasonable person should recognize that once the FCC makes such a ruling, the risk will be very high that the courts will overturn them.
As for me, I work in the industry but not for Comcast. Regardless, that doesn't make me blindly side with anything perceived as beneficial. It does give me reason to think about what would be a reasonable regulatory policy, and to care about whether that policy is even-handed.
Most consumers don't think, or care, about even-handedness. Do you?
Likewise if you live anywhere else, and your favorite NFL team isn't local. Or if you're a fanatic who simply _must_ see every game.
Why do you believe that these people's interest in seeing professional sports that happen not to be local to them is any less significant or important than you seeing your local sports?
If you read through all of my comments, you will not see one instance where I suggest that the desire to see local sports isn't a valid consumer concern. All I've been saying is:
1) The concerns of non-local sports fans are just as valid and important a concern, and
2) Any regulatory policy should be even-handed and fair.
I'm not saying there shouldn't be a ban on sports exclusives. I'm saying if there is going to be such a ban, it should apply across-the-board, to all competitors.
Why do you so vehemently reject the suggestion that out-of-market NFL fans' interests are equally important? Or the suggestion that policy should be even-handed?
Are you so angry with Comcast that you're unable to get any distance from the issue, and think about this from a public policy standpoint, rather than just a personal standpoint?
Also, Why is Philly the only city that has this issue with 3 major sports teams? I could almost understand if this was the norm. I think the Padres have a similar issue, and The MSG channel is not offered in HD for the Rangers. Really nothing compared to Philly. It is almost obsurd.
The reason I am upset is I am paying $90 a month x 12, over a $1000 a year. I understand I do not have to pay for both, but it is something I really enjoy, and it is a luxury I work hard for. I think I have a right to advocate for something that I feel is very reasonable. It just does not make sense to me that we are the only metro area that has to deal with this. You obviously understand the law better then I do, I am not in the industry. I am average Joe who just wants an even playing field with the rest of the country. I just hate feeling like I am getting ripped off/screwed over.
In your honest opinion, how do you see this playing out?
Comcast had the opportunity to purchase the Sunday Ticket about 10 years ago. I understand that they did not have an opportunity when DTV re-upped last year. DTV or Dish have NEVER been given the opportunity to bid on CSN. Dish does not have the ticket at all, so why block them? All I want is a choice. I am a hard working Philly City employee. I am currently a subscriber to both comcast and DTV, due to the fact that I am a die hard sports fan. I love DTV, and use it all the time except for that one channel, CSN. I pay an extra $90 to watch the Flyers, Phils n Sixers in HD every month. DTV offers more HD channels of live programing, and they have a ton of sorts channels. Anyway, why are we(Philly) forced to be put in this situation? No other city has this issue. The way Comcast has handled this over the years makes me HATE them, which is a shame, because I would love to support a home town company that has done so well. Why do they hold us hostage? I know at least 20 people who feel the same way. I have no choice, being a die hard fan, but I will dump them the day this hopefulyl goes through. Gotta love the way they treat their own city!
I acknowledged previously that it may be reasonable policy for the government to prohibit certain types of content from being exclusive. But if they do, it should apply the same to all. And nobody should be surprised if Comcast decides to make certain content exclusive where a competitor is allowed to, and has, done the same.
Regarding opportunity to bid for Sunday Ticket in the distant past, I believe if you research the issue, you'll learn that it's not nearly as straightforward and open a matter as you think. And anyway, as I've said before, in the same sense, DirecTV had the same opportunities to bid on Philly sports teams/rights that Comcast had.
Regardless, the opportunity to bid isn't relevant, either under law or to consumers. Would you feel better if DirecTV had bid on local Philly sports rights, and lost? Will you drop your complaint and forgive Comcast upon realizing DirecTV could have bid for those rights and created their own sports network, but chose not to?
If not, you should easily recognize: opportunity to bid simply isn't relevant.
The issue is simply whether sports exclusives should be allowed. I say, if they are prohibited, they should prohibited equally from all parties. Its only fair.
How so? Both are sports programming. Both are extremely important to some set of consumers (as evidenced by the $700M DirecTV pays for the Sunday Ticket exclusive). Both cannot be replaced by alternative programming.
Even leaving aside the core regulatory issue here -- that the FCC appears to have clearly gone beyond their statutory authority, given that the "terrestrial loophole" is actually written into the statute -- there is a basic fairness issue here that won't go away simply because you'd prefer to ignore it.
Why should cable companies be forced to share sports programming with DirecTV, while DirecTV is allowed to retain other sports programming as an exclusive. You can try to dismiss it, but the fact is, Comcast is quite justified in seeing the two issues as inextricably related.
If the government believes competition is best served by prohibiting exclusives on certain content, such as professional sports, so be it. But it should be considered categorically improper for the government to favor one competitor over another, by creating rules skewed to allow one to retain exclusive content, while prohibiting the other from doing the same.
There should be a level playing field (no pun intended). If you're going to argue seriously that current regulations are reasonable, then you need to do more than just offhandedly dismiss the complaint about disparate treatment for the Sunday
Not that it's relevant. But if you care, in that sense, the Flyers and Sixers were "up for bid" when Comcast bought them. Phillies' TV rights are "up for bid" periodically. DirecTV could have bought either, but didn't.
So what? None of that is relevant.
Under the law, that Comcast owns the networks it broadcasts, while DirecTV doesn't own the Sunday Ticket network is a relevant distinction. Of course, this distinction is irrelevant to consumers. What difference does it make to consumers whether DirecTV purchases the exclusive right to broadcast NFL games themselves, vs. purchasing the exclusive right to air NFL broadcasts of those games?
The same goes for the "terrestrial loophole." The law says satellite networks must be shared, terrestrial networks, not. But what consumer cares about that difference?
Comcast's point is simple: it should either be ok to retain exclusive sports programming, or not. If DirecTV can compete on that basis, then Comcast will too (against all competitors, just like DirecTV).
As for Philadelphians needing Comcast to see all local sports, other than the Eagles, sure I get that. Do you get that a Philadelphian who wants all games for any of the other 31 NFL teams needs DirecTV? Across the country, about 2 million households are forced to subscribe to DirecTV to get such. Almost certainly, households forced to DirecTV outnumber those forced to Comcast over this issue.