2019-02-11 AS-FILED REDACTED Comcast Answer to Bein 2Nd

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2019-02-11 AS-FILED REDACTED Comcast Answer to Bein 2Nd REDACTED – FOR PUBLIC INSPECTION Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) beIN SPORTS, LLC, ) Complainant, ) ) MB Docket No. 18-384 vs. ) File No. CSR-8972-P ) COMCAST CABLE ) COMMUNICATIONS, LLC ) And ) COMCAST CORPORATION, ) Defendants. ) ) To: Chief, Media Bureau ANSWER TO COMPLAINT Lynn R. Charytan Michael D. Hurwitz Francis M. Buono David P. Murray Ryan G. Wallach Melanie A. Medina COMCAST CORPORATION Samuel H. Eckland Comcast Center WILLKIE FARR & GALLAGHER LLP 1701 JFK Boulevard 1875 K Street, N.W. Philadelphia, PA 19103 Washington, DC 20006-1238 (215) 665-1700 (202) 303-1000 February 11, 2019 REDACTED – FOR PUBLIC INSPECTION TABLE OF CONTENTS I. INTRODUCTION............................................................................................................. 1 II. FACTS ............................................................................................................................... 5 III. THE COMMISSION CONCLUSIVELY DETERMINED THAT BEIN FAILED TO ESTABLISH A PRIMA FACIE CASE OF DISCRIMINATION BASED ON COMCAST’S DECEMBER 2017 OFFER. .................................................................... 8 A. beIN’s Second Complaint Is an Improper Challenge to the Dismissal Order ....................................................................................................................... 8 B. beIN Has Not Provided Any New or Credible Evidence That Disturbs the Commission’s Prior Conclusions .......................................................................... 12 IV. EVEN ASSUMING BEIN HAD PROVIDED SUFFICIENT CONTENT CERTAINTY, IT HAS FAILED TO SHOW THAT ITS NETWORKS ARE SIMILARLY SITUATED TO NBCSN OR UNIVERSO............................................ 17 A. The beIN Networks Exhibit Very Different Programming Than NBCSN and Universo. ........................................................................................................ 18 B. beIN Cannot Show That Its Audience and Ratings Are Similar to NBCSN and Universo, or That It Competes Uniquely with NBCSN and Universo for Advertisers ...................................................................................................... 26 C. Other Distributors Do Not View the beIN Networks as Similarly Situated to NBCSN or Universo ......................................................................................... 33 V. OTHER MARKETPLACE EVIDENCE CONFIRMS COMCAST’S LEGITIMATE, NON-DISCRIMINATORY BUSINESS JUDGMENT AND NEGATES ANY CLAIM OF AFFILIATION-BASED DISCRIMINATION. ......... 40 A. Comcast Reasonably Concluded That It Was Not in Its Economic Best Interest To Pay Higher Fees and Expand Distribution for the beIN Networks ............................................................................................................... 41 B. beIN’s Other Claims of Discrimination Based on HD Carriage, Authentication, and a Direct-to-Consumer Offering Are Likewise Without Merit ...................................................................................................................... 46 VI. BEIN CANNOT SHOW THAT COMCAST’S DECEMBER 2017 OFFER HAS UNREASONABLY RESTRAINED BEIN’S ABILITY TO COMPETE FAIRLY. 47 VII. RESPONSE TO NUMBERED PARAGRAPHS.......................................................... 51 VIII. CONCLUSION ............................................................................................................... 72 REDACTED – FOR PUBLIC INSPECTION EXHIBITS Declaration of Andrew Brayford ........................................................................................ Exhibit 1 January 2018 Viewership Analysis ..................................................... Attachment A January 2018 Viewership Analysis Adjustments ............................... Attachment B Cover e-mail to beIN March 7 Proposal ............................................. Attachment C beIN March 7 Proposal ....................................................................... Attachment D Declaration of Justin Smith ................................................................................................ Exhibit 2 Supplemental Declaration of Dr. Andres Lerner ................................................................ Exhibit 3 Declaration of Dr. Andres Lerner ....................................................... Attachment A Supplemental Declaration of Peter Litman ........................................................................ Exhibit 4 Declaration of Peter Litman ................................................................ Attachment A Letter from Francis M. Buono, Senior Vice President, Legal Regulatory Affairs & Senior Deputy General Counsel, Comcast Corporation, to Pantelis Michalopoulos, Esq., Steptoe & Johnson, LLP (Dec. 13, 2018) ........................................ Exhibit 5 Comcast Spotlight One-Sheet: NBCSN.............................................................................. Exhibit 6 Screenshots from beIN Website .......................................................................................... Exhibit 7 Comcast Spotlight One-Sheet: beIN ................................................................................... Exhibit 8 Comcast Spotlight One-Sheet: Universo ............................................................................ Exhibit 9 Carriage of beIN Sports, beINE, NBCSN, and Universo by Top 15 MVPDs (detailed charts) ...................................................................................... Exhibit 10 beIN June 4, 2018 Public Distribution Data ..................................................................... Exhibit 11 REDACTED – FOR PUBLIC INSPECTION Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) beIN SPORTS, LLC, ) Complainant, ) ) MB Docket No. 18-384 vs. ) File No. CSR-8972-P ) COMCAST CABLE ) COMMUNICATIONS, LLC ) And ) COMCAST CORPORATION, ) Defendants. ) ) ANSWER TO COMPLAINT Defendants Comcast Corporation and Comcast Cable Communications, LLC (together, “Comcast”) submit this Answer to the complaint (the “Second Complaint”) filed by beIN Sports, LLC (“beIN”) on December 13, 2018.1 I. INTRODUCTION The Second Complaint is an improper attempt to re-litigate the Commission’s prior dismissal of beIN’s March 2018 Complaint (the “First Complaint”). In its Dismissal Order, the Commission determined that beIN had failed to establish a prima facie showing of 1 beIN Sports, LLC, Program Carriage Complaint, MB Docket No. 18-384 (Dec. 13, 2018) (“Second Compl.”). Following an inquiry from counsel for Comcast, beIN submitted a supplement to its Second Complaint five days later to include an appendix to the correspondence included as Exhibit 16 of the Second Complaint that beIN had wrongly omitted. beIN filed that supplement in MB Docket No. 18-90, but it should be considered as part of beIN’s Second Complaint in MB Docket No. 18-384. See Letter from Pantelis Michalopoulos, Counsel for beIN Sports, LLC, to Marlene Dortch, Secretary, FCC, MB Docket No. 18-90 (Dec. 18, 2018) (filing Appendix A to the December 13, 2018 letter from Francis M. Buono to Pantelis Michalopoulos included as Exhibit 16 of the Second Complaint). For the sake of a complete record, Comcast has reattached herein the full December 13, 2018 letter, including Appendix A, as Ex. 5. REDACTED – FOR PUBLIC INSPECTION discrimination based on affiliation. The Commission issued this ruling after review of the parties’ term sheets and negotiating documents from April 2017 through February 2018 that beIN put into the record, as well as beIN’s sworn written testimony. The Commission found that beIN’s renewal offers lacked sufficient content certainty to support a program carriage discrimination case. beIN did not seek reconsideration or review of the Dismissal Order, which is final. The Second Complaint now seeks to obtain a different result, yet it relies on the very same term sheets and negotiating history to do so. Mistakenly treating the Commission’s prima facie determination as nothing more than “guidance,” beIN contends that it provided the missing content certainty to Comcast in oral communications early on in the parties’ negotiations, thus “clos[ing] the gap” identified in the Dismissal Order. But the Dismissal Order did not find a “gap” to be filled through artful pleading or new assertions that could have been supplied in the first instance. The Commission made detailed findings about the significant uncertainty over beIN’s future programming from the outset of the parties’ negotiations in April 2017 up through when beIN filed the First Complaint. Although the Dismissal Order was without prejudice to beIN bringing a different complaint, this does not permit re-litigation of an explicit Commission ruling on the same claim – one that beIN chose not to appeal: beIN’s Second Complaint constitutes an impermissible collateral attack on the Dismissal Order and is precluded. Even if it were not otherwise barred by principles of collateral estoppel, the Second Complaint provides no factual basis for the Commission to reach a different prima facie determination. beIN’s belated assertion that it addressed the lack of content certainty in early communications with Comcast is contradicted by the actual term sheets that the parties exchanged and the record the Commission already examined. Comcast’s December 2017 2 REDACTED – FOR PUBLIC INSPECTION renewal offer (the “December 2017 Offer”) stated that beIN’s content was [[ ]] And, as the Commission has already found, beIN’s subsequent
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