PUBLIC VERSION - REDACTED Markham C
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PUBLIC VERSION - REDACTED Markham C. Erickson 2024298032 [email protected] STEPTOE & JOHNSON LLP 1330 Connecticut Avenue, NW Washington, DC 20036-1795 202 429 3000 main www.steptoe.com REDACTED - FOR PUBLIC INSPECTION June 8, 2017 Hand Delivery and Electronic Filing Michelle Carey, Chief, Media Bureau Marlene Dortch, Secretary Federal Communications Commission 445 12th St. NW Washington, D.C. 20554 RE: Complaint, Word Network Operating Company, Inc. D/B/A The Word Network v. Comcast Corporation and Comcast Cable Communications, LLC Dear Ms. Carey and Ms. Dortch: The Word Network submits the attached redacted version of its Complaint against Comcast Corporation and Comcast Cable Communications, LLC. The" { }" symbols denote where confidential information has been redacted. The confidential version of this filing is being simultaneously filed with the Commission along with a request for confidentiality. Please contact me with any questions. Respectfully submitted, rickson Counsel for The Word Network PUBLIC VERSION - REDACTED Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matter of ) ) WORD NETWORK OPERATING ) File No. CSR-____-P COMPANY, INC. D/B/A THE WORD ) NETWORK, ) Complainant, ) ) v. ) ) COMCAST CORPORATION ) and ) COMCAST CABLE COMMUNICATIONS, ) LLC, ) Defendants. ) TO: Chief, Media Bureau COMPLAINT Markham C. Erickson Christopher Bjornson Matthew R. Friedman STEPTOE & JOHNSON LLP 1330 Connecticut Ave, N.W. Washington, D.C. 20036 (202) 429-3000 Counsel to Word Network Operating Company, Inc. d/b/a The Word Network June 8, 2017 PUBLIC VERSION - REDACTED TABLE OF CONTENTS INTRODUCTION......................................................................................................................... 1 JURISDICTION AND STATEMENT OF FACTS ................................................................... 7 A. Jurisdiction ............................................................................................................ 7 B. The Parties ............................................................................................................. 8 1. The Word Network ........................................................................................... 8 2. Comcast ............................................................................................................ 10 C. Comcast’s Unlawful Conduct ............................................................................ 13 I. STATUTORY AND REGULATORY BACKGROUND ............................................ 18 A. Comcast-NBCU Order – Anti-Discrimination Condition................................. 18 B. Comcast-NBCU Order – Online Conditions. ..................................................... 21 C. Section 616 and Related Program Carriage Rules. ......................................... 21 II. COMCAST DISCRIMINATED AGAINST TWN ON THE BASIS OF AFFILIATION AND NON-AFFILIATION IN THE SELECTION, TERMS, AND CONDITIONS OF CARRIAGE IN VIOLATION OF THE COMCAST-NBCU ORDER ............................................................................................................................. 22 A. TWN is a high-quality network that provides popular, original video programming that Comcast consumers desire................................................. 22 B. There is no “legitimate business reason” for Comcast’s decision to reduce distribution of TWN. .......................................................................................... 25 C. Comcast treats its affiliated networks better than TWN. ............................... 32 D. Comcast unlawfully discriminated against TWN when it demanded certain of TWN’s digital rights. ...................................................................................... 39 III. COMCAST DEMANDED TWN’S DIGITAL RIGHTS IN VIOLATION OF THE COMCAST-NBCU ORDER ............................................................................................ 41 A. Comcast Violated the Comcast-NBCU Order’s prohibition on entering into an arrangement that limits TWN’s ability to provide its video programming to OVDs. ................................................................................................................... 41 ii PUBLIC VERSION - REDACTED B. Comcast violated the Comcast-NBCU Order’s prohibition on engaging in unfair methods of competition, acts or practices that significantly hinder TWN’s ability to provide its video programming to subscribers. .................. 42 IV. COMCAST DEMANDED TWN’S DIGITAL RIGHTS IN VIOLATION OF SECTION 616 AND THE COMMISSION’S PROGRAM CARRIAGE RULES. .. 43 A. Comcast demanded a financial interest in TWN. ............................................ 43 B. Section 616 forbids Comcast from requiring a financial interest in TWN as a prerequisite for carriage. .................................................................................... 43 C. TWN has demonstrated a prima facie case of a financial interest violation. 45 REQUEST FOR RELIEF .......................................................................................................... 46 iii PUBLIC VERSION - REDACTED Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matter of ) ) WORD NETWORK OPERATING ) File No. CSR-____-P COMPANY, INC. D/B/A THE WORD ) NETWORK, ) Complainant, ) ) v. ) ) COMCAST CORPORATION ) and ) COMCAST CABLE COMMUNICATIONS, ) LLC, ) Defendants. ) TO: Chief, Media Bureau COMPLAINT INTRODUCTION 1. Comcast informed The Word Network (“TWN”) on November 11, 2016 in a two-sentence letter that it would drastically decrease carriage of TWN by eliminating it from 456 Comcast systems. Comcast had carried TWN since TWN’s inception in 2000. Comcast had never before intimated that it was anything but pleased with its relationship with TWN. Comcast’s decision was unilateral and unexpected. Further, the decision was not based on any legitimate business reason. When TWN asked for an explanation of the reasons for this PUBLIC VERSION - REDACTED treatment, Comcast Cable’s Senior Vice President of Content Acquisition simply responded: “Because we are Comcast, and we can.”1 2. Comcast’s treatment of independent, unaffiliated TWN is precisely the behavior that concerned the Commission during its review of Comcast’s acquisition of NBC Universal. To address findings of fact that Comcast would have the increased incentive and ability to discriminate against independent programmers, the Commission adopted behavioral remedies, including prohibiting Comcast from “discriminat[ing] in video programming distribution on the basis of affiliation or nonaffiliation of vendors in the selection of, or terms or conditions for, carriage, including in decisions regarding tiering and channel placement.”2 3. This non-discrimination condition operates independently of, and in addition to, Section 616 of the Communications Act of 1934, as amended (“Section 616”), and the Commission’s program carriage rules. It is binding on Comcast until January 2018. To demonstrate a violation of this condition, TWN needs to demonstrate only that “it was discriminated against on the basis of its affiliation or non-affiliation.”3 TWN does not need to show that “it was unreasonably restrained from competing.”4 Nor does TWN need to establish a prima facie case of Comcast’s violation of this condition.5 1 Declaration of Kevin Adell ¶ 25 (“Adell Decl.”), attached as Exhibit 1. 2 Applications of Comcast Corporation, General Electric Company and NBC Universal, Inc. for Consent to Assign Licenses and Transfer Control of Licensees, Memorandum Opinion and Order, 26 FCC Rcd. 4238, 4287 ¶ 121 (2011) (“Comcast-NBCU Order” or “Order”). The Commission also required Comcast to: (1) include all independent news and business news channels in any news and business news channel neighborhoods that Comcast may establish; and (2) add ten new independently owned-and-operated channels to its digital (D1) tier. See id. at 4358, Appendix A, Conditions III(2) and III(3). 3 Id. at 4287 ¶ 121. 4 Id. 5 While section 76.1302 of the Commission’s rules serves as the general framework for complaining about a violation of the Order’s non-discrimination condition, the prima facie case 2 PUBLIC VERSION - REDACTED 4. Comcast violated the Comcast-NBCU Order’s non-discrimination provision in two ways. First, it slashed distribution of TWN—the leading network in its genre— without a valid business justification. In contrast, Comcast increased the distribution and per- subscriber payments to networks Comcast owns—even for those networks that perform poorly in their respective genres. This disparity in treatment would not have occurred but for the fact that TWN is not affiliated with Comcast while those poorly performing networks are owned by Comcast. Second, Comcast demanded rights to TWN’s digital distribution in order for TWN to avoid having TWN’s carriage cut in half. Such an interest, if granted, would create an affiliation between TWN and Comcast. In short, Comcast’s actions patently violated the Comcast-NBCU Order’s prohibition on making carriage decisions based on affiliation or nonaffiliation with Comcast. 5. TWN is the largest African American religious network in the world. It is the leading network in the genre of African American religious programming, and consequently, it is a desirable network. It provides high-quality, original ministry programming to tens of millions of consumers in the United States. Since its founding in 2000, TWN has been continually carried by Comcast. Over this time, TWN improved the quality