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Redacted - for Public Inspection REDACTED - FOR PUBLIC INSPECTION Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) AMC NETWORKS INC., ) Complainant, ) File No.:______________ ) v. ) ) AT&T INC., ) Defendant. ) TO: Chief, Media Bureau Deadline PROGRAM CARRIAGE COMPLAINT OF AMC NETWORKS INC. Tara M. Corvo Alyssia J. Bryant MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. 701 Pennsylvania Avenue, NW Suite 900 Washington, DC 20004 (202) 434-7300 Scott A. Rader MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. Chrysler Center 666 Third Avenue New York, NY 10017 (212) 935-3000 Counsel to AMC Networks Inc. August 5, 2020 REDACTED - FOR PUBLIC INSPECTION TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................. 5 1. Jurisdiction ........................................................................................................................ 5 2. AMCN ................................................................................................................................ 5 3. AT&T ................................................................................................................................. 6 4. AT&T’s Public Assurances During the Civil Antitrust Litigation .............................. 7 5. AT&T’s Discriminatory Conduct ................................................................................... 9 i. The Networks................................................................................................................ 9 ii. Competition for and the Cost of Content Is Increasing ........................................... 12 iii. Significance of Distribution Over Online Video Services and Platforms to the Success of a Network ................................................................................................. 13 iv. Carriage Negotiations with AT&T ............................................................................ 16 ARGUMENT ................................Deadline................................................................................................ 17 1. AMC and AMC+ Are Similarly Situated to TNT and HBO. ..................................... 19 i. Genre .......................................................................................................................... 19 ii. Targeted Programming .............................................................................................. 23 iii. Target Audience ......................................................................................................... 27 iv. Targeted Advertising .................................................................................................. 28 v. Actual Audience/Ratings ........................................................................................... 32 vi. Other Factors ............................................................................................................. 34 2. AT&T Is Discriminating Against AMC and AMC+ on the Basis of Non-Affiliation. .. …………………………………………………………………………………………………35 i. AT&T treats its own networks very differently from how it seeks to treat AMCN and AMC+ ......................................................................................................................... 35 ii. There is no legitimate business reason for this difference in treatment; AT&T is discriminating against AMC and AMC+ to promote its affiliates ........................... 38 3. AT&T’s Discrimination Unreasonably Restrains AMC’s Ability to Compete Fairly. ……………………………………………………………………………………………47 REQUEST FOR RELIEF ............................................................................................................. 51 EXHIBITS A. Transcript, United States v. AT&T, Inc., No. 1:17-cv-02511-RJL (D.D.C. Mar. 22, 2018, 11:30 a.m.) i REDACTED - FOR PUBLIC INSPECTION B. Letter from Tara M. Corvo, Member, Mintz to Bruce R. Byrd, Senior Vice President and Assistant General Counsel, AT&T (July 22, 2020) C. Letter from Bruce R. Byrd, Senior Vice President and Assistant General Counsel, AT&T, to Tara M. Corvo, Member, Mintz (July 24, 2020) D. Complaint, United States v. AT&T, Inc., No. 1:17-cv-02511-RJL (D.D.C. Nov. 20, 2017) E. Defendants’ Proposed Findings of Fact and Conclusions of Law, United States. v. AT&T, Inc., No. 1:17-cv-02511-RJL (D.D.C. Aug. 3, 2018) F. AMC Weekly Programming Schedule (3/30/20-4/5/20 through 7/6/20-7/12/20) G. TNT Network Economics, S&P Global (last accessed July 27, 2020) H. {{ }} I. {{ Deadline}} J. TNT Programming Schedule (8/1/20 through 8/14/20) K. {{ }} L. {{ }} M. {{ }} N. {{ }} O. { { }} P. {{ }} Q. {{ }} R. {{ }} S. {{ }} T. {{ }} ii REDACTED - FOR PUBLIC INSPECTION U. {{ }} V. {{ }} W. {{ }} X. {{ }} Y. {{ }} Z. {{ }} Deadline AA. {{ }} BB. {{ }} CC. {{ }} DD. {{ }} EE. {{ }} FF. {{ }} GG. {{ )}} HH. {{ }} II. {{ }} JJ. {{ }} iii REDACTED - FOR PUBLIC INSPECTION Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) AMC NETWORKS INC., ) Complainant ) File No.:______________ ) v. ) ) AT&T INC., ) Defendant. ) TO: Chief, Media Bureau PROGRAM CARRIAGE COMPLAINT OF AMC NETWORKS INC. Deadline INTRODUCTION 1. Over the last decade, multiple mega mergers and acquisitions in the video programming industry have resulted in numerous multichannel video programming distributors (“MVPDs”) becoming programming conglomerates with massive market share and bargaining power by acquiring networks and programmers. Foremost among these is AT&T Inc. (“AT&T”), which acquired Time Warner Inc. (“Time Warner”) and its programming networks in 2018. This merger combined AT&T, the nation’s second largest MVPD, and Time Warner, which operates many of the nation’s most popular programming networks, including TNT, TBS, CNN, and HBO. Against this backdrop of increasing consolidation between programmers and distributors, AMC Networks Inc. (“AMCN”) is one of the few remaining independent programmers. 2. AMCN’s flagship network, AMC (“AMC”), is among the most successful networks available for distribution today. AMC is well-known and highly valued by consumers for its award-wining original scripted dramas, such as Mad Men, Breaking Bad, The Walking Dead, Into the Badlands, Killing Eve and Better Call Saul, along with its slate of acquired movies. 1 REDACTED - FOR PUBLIC INSPECTION AMC also is one of an increasing number of networks traditionally delivered only as linear networks that have recognized that the future for video content lies with distribution over innovative online video services and platforms that can evolve with and attract prudent viewers to enhance the strength of their linear television offering. AMC has thus begun offering its networks and content in myriad ways via cutting-edge products, services and apps, including by offering unique subscription video on demand (“SVOD”) products and offering video content on an increasing number of online platforms. 3. AT&T is now attempting to stifle AMC’s ability to compete fairly by using its colossal market power as a vertically integrated MVPD to disadvantage AMCN’s linear networks, AMC and AMC+,1/ in favorDeadline of AT&T’s own affiliated networks that are similarly situated to and compete with AMC and AMC+. These affiliated networks include HBO (which competes with and is similarly situated to AMC and AMC+) and TNT (which also competes with and is similarly situated to AMC). 4. AT&T is engaging in this discriminatory conduct even though it repeatedly promised during the civil antitrust litigation filed by the United States Department of Justice challenging its acquisition of Time Warner (the “Civil Antitrust Litigation”) that it would not use its bargaining leverage as a vertically integrated MVPD to cause harm to other MVPDs, evolving online platforms, or programming networks. Now, however, AT&T is attempting to do exactly that. It is attempting to cause severe harm to the smaller and independent network AMC, which offers a fresh, independent and diverse voice on MVPDs’ channel lineups that is highly valued by subscribers, for the benefit of AT&T’s competing and similarly situated networks, TNT and HBO. 1/ See ¶ 23, infra, for a description of AMC+, AMCN’s newest linear network. 2 REDACTED - FOR PUBLIC INSPECTION 5. Specifically, AT&T has presented AMCN with an offer that is clearly discriminatory in light of AT&T’s treatment of its own networks: AMCN either (i) has to {{ }}. Either result would have a severe impact on AMC’s ability to compete fairly. The most egregious terms in AT&T’s offer include: {{ ;2/ Deadline }}. These terms are extremely atypical in the marketplace, where AMC is widely distributed and compensated fairly. 6. AT&T claims that the terms it has proposed for its affiliation agreement with AMCN are economically motivated. AT&T cannot plausibly assert, however, that economics justify the onerous and stifling terms and restrictions that it is seeking to impose on AMCN, because AT&T does not appear to impose such terms and restrictions on its own similarly situated affiliated networks that compete with AMC and AMC+. The only plausible justification for 2/ Specifically, AT&T is requiring AMCN to agree that {{ }} 3 REDACTED - FOR PUBLIC INSPECTION AT&T’s disparate treatment is discrimination on the basis of affiliation, in which AT&T is seeking to unfairly advantage its own networks,
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