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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 ) ) LIBERMAN BROADCASTING, INC. ) MB Docket No. 16-121 and ) LBI MEDIA, INC., ) Complainants, ) File No. CSR-8922-P ) vs. ) ) COMCAST CORPORATION ) and ) COMCAST CABLE ) COMMUNICATIONS, LLC, ) Defendants. ) ) To: Chief, Media Bureau ANSWER TO PROGRAM CARRIAGE COMPLAINT Lynn R. Charytan Jay Cohen Francis M. Buono Andrew G. Gordon Julie Laine Gary R. Carney Frank La Fontaine George W. Kroup COMCAST CORPORATION PAUL, WEISS, RIFKIND, WHARTON & Comcast Center GARRISON LLP 1701 JFK Boulevard 1285 Avenue of the Americas Philadelphia, PA 19103 New York, NY 10019-6064 (215) 665-1700 (212) 373-3000 Michael D. Hurwitz James L. Casserly WILLKIE FARR & GALLAGHER LLP 1875 K Street, N.W. Washington, DC 20006-1238 June 7, 2016 (202) 303-1000 REDACTED – FOR PUBLIC INSPECTION TABLE OF CONTENTS Page INTRODUCTION AND SUMMARY ........................................................................................... 2 FACTS ............................................................................................................................................ 8 A. LBI Requests Broader EstrellaTV Carriage and Retransmission Consent Fees from Comcast.................................................................................................. 8 B. Comcast Proposes { }; LBI Rejects the Offer................................................................. 11 C. LBI Continues to Demand Retransmission Consent Fees for EstrellaTV ............ 14 D. LBI Once Again Accuses Comcast of Affiliation-Based Discrimination ............ 15 E. Comcast Did Not Discriminate Against EstrellaTV on the Basis of Affiliation.............................................................................................................. 16 F. LBI Pulls EstrellaTV’s Signals from Comcast Systems in Houston, Denver, and Salt Lake City ................................................................................... 20 G. Comcast Sees No Meaningful Reaction from Customers in Houston, Denver, and Salt Lake City After LBI Pulls Its Signals from Those Markets.................................................................................................................. 21 H. LBI Files a Carriage Discrimination Complaint ................................................... 22 ARGUMENT ................................................................................................................................ 23 I. LBI IS A BROADCASTER THAT CANNOT BRING A SECTION 616 CARRIAGE COMPLAINT ................................................................................................................... 25 A. The 1992 Cable Act Establishes Separate Regimes for Cable Networks and Broadcasters ................................................................................................... 26 B. The Commission Has Consistently Treated Retransmission Consent and Program Carriage as Mutually Exclusive Regimes .............................................. 33 C. The Comcast-NBCUniversal Order Does Not Give LBI Standing to Bring a Program Carriage Complaint ............................................................................. 38 II. COMCAST DID NOT DEMAND A FINANCIAL INTEREST IN ESTRELLATV AS A CONDITION OF CARRIAGE ............................................................................... 40 A. The Digital Distribution Rights Comcast Requested from EstrellaTV Are Not a “Financial Interest” Under Section 616 ...................................................... 41 i REDACTED – FOR PUBLIC INSPECTION B. Comcast Did Not Demand EstrellaTV’s Digital Rights as a Condition of Carriage ................................................................................................................. 44 III. THE STATUTE OF LIMITATIONS BARS LBI’S CLAIMS......................................... 45 IV. COMCAST MADE A REASONABLE, GOOD FAITH BUSINESS DECISION TO DENY LBI’S CARRIAGE PROPOSALS ....................................................................... 50 A. Comcast’s Contemporaneous Decisionmaking Process Reflects that Its Decision Was Made for Non-Discriminatory Reasons......................................... 51 B. Carriage of EstrellaTV and Telemundo by Other MVPDs Further Supports Comcast’s Good Faith Carriage Decision............................................................. 60 C. Comcast’s Carriage of Spanish-Language Networks Reflects an Absence of Affiliation-Based Discrimination ..................................................................... 62 V. LBI CANNOT MAKE OUT A CLAIM THAT BROADER CARRIAGE ON COMCAST WOULD PROVIDE COMCAST WITH A “NET BENEFIT”.................... 63 VI. ESTRELLATV IS NOT SIMILARLY SITUATED TO TELEMUNDO OR NBC UNIVERSO ...................................................................................................................... 66 A. EstrellaTV Targets and Broadcasts Different Programming than Telemundo and NBC Universo............................................................................. 68 1. LBI Admits that EstrellaTV Is Different than Telemundo ....................... 68 2. EstrellaTV In Fact Programs In Different Genres than Telemundo and NBC Universo .................................................................................... 71 B. EstrellaTV Targets and Attracts a Different Audience than Telemundo and NBC Universo....................................................................................................... 75 C. EstrellaTV Does Not Compete with Telemundo or NBC Universo in Any Meaningful Way ................................................................................................... 79 VII. LBI HAS NOT BEEN UNREASONABLY RESTRAINED IN ITS ABILITY TO COMPETE ........................................................................................................................ 81 VIII. THE RELIEF SOUGHT BY LBI VIOLATES THE FIRST AMENDMENT ................. 82 RESPONSE TO NUMBERED PARAGRAPHS ......................................................................... 85 CONCLUSION ............................................................................................................................. 93 ii REDACTED – FOR PUBLIC INSPECTION Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) LIBERMAN BROADCASTING, INC. ) MB Docket No. 16-121 and ) LBI MEDIA, INC., ) Complainants, ) File No. CSR-8922-P ) vs. ) ) COMCAST CORPORATION ) and ) COMCAST CABLE ) COMMUNICATIONS, LLC, ) Defendants. ) ) ANSWER TO PROGRAM CARRIAGE COMPLAINT Defendants Comcast Corporation and Comcast Cable Communications, LLC (together, “Comcast”) submit this Answer to the Program Carriage Complaint (the “Complaint”) filed by Liberman Broadcasting, Inc. and LBI Media, Inc. (together, “LBI”) claiming that Comcast has discriminated on the basis of affiliation by not carrying LBI’s Spanish-language network, EstrellaTV, on the same terms as Comcast’s affiliated Spanish-language networks, Telemundo and NBC Universo, and that Comcast has demanded a financial interest in EstrellaTV as a condition of carriage, in violation of Section 616 of the Communications Act of 1934 (“Section 616”), the governing Commission regulations, and the conditions of Comcast’s acquisition of NBC Universal. For the reasons set forth below, none of these claims has any merit, and the Complaint should be dismissed without further proceedings. 1 REDACTED – FOR PUBLIC INSPECTION INTRODUCTION AND SUMMARY The Commission has previously observed that program carriage complaints may be resolved on a written record, without any need to burden the parties or the Commission with further proceedings before an ALJ to determine if an MVPD discriminated on the basis of affiliation. This is such a case. There is nothing LBI has asserted in its Complaint—and nothing it can assert in reply to this Answer—that could lead the Commission to conclude that LBI has made out a prima facie case of discrimination on the basis of affiliation that would require the time, burden, and expense of a hearing, much less the extensive discovery that would precede that hearing.1 There are three principal reasons why the Commission should conclude, as a matter of law, that LBI’s Complaint fails at the threshold: First, and most fundamentally, as a broadcaster LBI is not a video programming vendor (“VPV”) that has standing to pursue a program carriage complaint under Section 616 of the Communications Act and the Commission’s rules (or the Comcast-NBCUniversal conditions, which incorporate these rules2). No prior decision of the Commission authorizes a broadcaster to bring such a complaint, which is designed to afford a remedy to cable networks that have been discriminated against on the basis of affiliation or otherwise harmed in violation of Section 616 by MVPDs. The carriage of broadcasters such as LBI is governed instead by an entirely distinct must-carry/retransmission consent regime that affords robust protections for broadcasters 1 Revision of the Commission’s Program Carriage Rules: Leased Commercial Access; Development of Competition and Diversity in Video Programming Distribution & Carriage, 26 FCC Rcd. 11494, 11502 ¶ 10 (2011) (“Second Report & Order”) (finding that the prima facie case requirement “is important to dispose promptly of frivolous complaints and to ensure that only legitimate complaints proceed to further evidentiary proceedings”). 2 Applications of Comcast Corp., General Electric Co. & NBC Universal,
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