FOR PUBLIC INSPECTION BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Complaint of BLOOMBERGL.P. 1 MB Docket No. 11-104 1 v. 1 1 COMCASTCABLE COMMUNICATIONS, LLC ) 'To: The Chief. Media Bureau REPLY OF BLOOMBERG L.P. TO ANSWER OF COMCAST CABLE COMMUNICATIONS, LLC RECEIVED - FCC Gregory Roger Rabyal. Stephen Diaz Gavin AUG 3 0 2011 BLOOMBERG L.P. I<evin J. Martin 1399 New York Avenue, NW Janet F. Moran ~~anmunlatiarsCommiselMl Washington, DC 20005 Matthew 3.Berry mldffice (202) 654-7300 Carly Didden PATTON BOGGS LLP 2550 M Street, N.W. Washington, DC 20037 (202) 457-6000 Robert Silver BOIES SCHILLER & FLEXNER LLP 575 Lexington Avenue, 7thFloor New York, NY 10022 (212) 446-2300 August 30,201 1 FOR PUBLIC INSPECTION TABLE OF CONTENTS Paae I. INTRODUCTION AND SUMMARY....................................................................................... 2 11. THE NEWS NEIGHBORHOODING CONDITION APPLIES TO EXISTING NEIGHBORHOODS .............................................................................................. 4 A. The Text of the Condition Indicates That It Applies to Existing Neighborhoods ..................................................................................................................... 4 B. Interpreting the News Neighborhooding Condition to Cover Existing Neighborhoods is Consistent With Commission Policy and the Record before the Commission ...................................................................................................... 9 111. COMCAST CARRIES HUNDREDS OF NEWS NEIGHBORHOODS THAT DO NOT INCLUDE BTV .................... ................................................................... 13 A. The Neighborhoods Identified By Bloomberg Contain a "Significant Number or Percentage of News Channels" .............................................................. 13 1. The Neighborhoods Identified by Bloomberg Have a Significant Number of News Channels ......................................................... 14 2. The Neighborhoods Identified by Bloomberg Have a Significant Percentage of News Channels .................................................... 18 3. Comcast Vastly Overstates the Number of News Channels on Its Headends ......................................................................................................... 21 B. The Neighborhoods Identified by BIoomberg Are Consistent with Industry Practice. .............................................................................................................. .31 C. The Neighborhoods Identified by BIoomberg Are Consistent with the Record Before the Commission..................................................................................... 38 D. Bloomberg's Interpretation of the News Neighborhooding Condition Leads to Reasonable Results While Comcast's Interpretation of the Condition Does Not.......................................................................................................... 41 IV. COMCAST GREATLY EXAGGERATES ANY BURDENS ASSOCIATED WITH IMPLEMENTING THE NEWS NEIGHBORHOODING CONDITION ............................ .. ................................................................................................. 50 A. Comcast's Frequent Channel Changes Substantially Undermine Its Claim that the News Neighborhooding Condition Imposes Substantial Burdens ................................................................................................................................. 51 B. Comcast Dramatically Overstates the Burdens Imposed by Implementing the News Neighborhooding Condition .......................................... 64 C. Any Burdens Imposed by the News Neighborhooding Condition Are Quite Manageable ............................................................................................................. 68 D. Any Burdens Associated with the News Neighborhooding Condition Were Not Unforeseen by the Commission ................................................................. 71 FOR PUBLIC INSPECTION V . THE COMPLAINT SHOULD NOT BE SENT TO AN ADMINISTRATIVE LAW JUDGE .......................................................................................... 74 VI . THE COMMISSION NEED NOT OPINE ON VARIOUS REMEDIAL QUESTIONS POSED BY COMCAST .................................................................................... 78 VII . CONCLUSION ........................................................................................................................... 81 FOR PUBLIC INSPECTION BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Complaint of BLOOMBERGL.P. 1 MB Docket No. 11-104 1 v. 1 1 COMCASTCABLE COMMUNICATIONS, LLC 1 1 To: The Chief. Meda Bureau REPLY OF BLOOMBERG L.P. TO ANSWER OF COMCAST CABLE COMMUNICATIONS, LLC Bloomberg L.P. ("Bloomberg") hereby replies1 to the Answer of Comcast Cable Communications, LLC~(Tomcast") to Bloomberg's Complaint ("Complaint") that Comcast has faded to comply with the news neighborhooding condition adopted by the Federal Communications Commission ("Commission") in its order granting the application of Comcast Corporation, General Electric Company ("GE"), and NBC Universal, Inc. ("NBCU") to transfer control of licenses from GE to C~rncast.~ 1 On August 2,201 1, the Commission granted Bloomberg's request for an extension of time to file this Reply und August 30,2011. Therefore, this Reply is timely filed. See Email from Steven Broeckaert, Senior Deputy Chief, Policy Division, Media Bureau, Federal Communications Commission to Stephen Diaz Gavin, Counsel to Bloomberg (Aug. 2,2011) (on file with Bloomberg) ("For the reasons set forth in the Consent Motion for Extension of Time filed by Bloomberg L.P., the extension of time to file a Reply is granted as requested."). 2 See Answer of Comcast Cable Communications LLC, In re Bloomberg LP., Complaimnt v. Con~cdstCuttl'e Con~mz~tzications~LLC, Defendant, MB Docket No. 11-104 (filed July 27,2011) (('Answer"). "ee In re Applications of Comcast Corp., General Electric Co., and NBC Universal Inc. For Consent to Assign Licenses and Transfer Control of Licenses, Memoratzdtmz Opinion and Order, 26 FCC Rcd 4238 (201 1) ("FCC Order"). FOR PUBLIC INSPECTION I. INTRODUCTION AND SUMMARY This case revolves around two narrow and straightforward questions: (1) Whether the news neighborhooding condition applies to news neighborhoods that were being carried by Comcast on the date the Colnmission approved the Corncast-NBCU Merger and are being carried today; and (2) whether the groupings of news channels identified by Bloomberg in the Complaint qualify as neighborhoods pursuant to the terms of that condition. The answers to these two questions may be found in the language of the news neighborhooding condition itself. First, the Commission stated that the condition applied if "Corncast aow or in thef~tzdre carries news and/or business news channels in a neighb~rhood."~Thus, it is clear that anv news neighborhood in existence on the date of the FCC Order or thereafter would be covered. Second, the Commission defined a neighborhood to refer to "a s&~z$cannt nt~mber orpercentage of news and/or business news channels substantially adjacent to one another in a system's channel lineup."' Thus to the extent that Comcast today is carrying "a significant number or percentage of news channels substantially adjacent to one another in a system's channel lineup," the condition applies. In its Complaint, Bloomberg identified 368 groupings where there are at least four news channels in a block of hve adjacent channel positions. These groupings qualifj as neighborhoods for two independent reasons: they contain both a "significant number" and a "significant percentage" of news channels. Since Comcast is currently carrying these neighborhoods, it must comply with the news neighborhooding conchtion. In its Answer, Comcast attempts to rewrite the news neighborhooding condition. Rather than applying to news neighborhoods that Comcast carries "now or in the future," Comcast instead wants the condition to cover only news neighborhoods that it might create "in the future." Id. at 4358 (App. A, Sec. 111.2) (emphasis added). ' Id. (emphasis added). FOR PUBLIC INSPECTION Similarly, instead of interpreting the term "neighborhood" to cover any grouping of "a significant number or percentage" of news channels, Comcast contends that only a grouping of "all or a substantial majority" of news channels qualifies as a neighborhood. Comcast, however, is obligated to comply with the news neighborhood condition that the Commission adopted, not a hypothetical version that Comcast wishes the Commission had adopted instead. Beyond trying to rewrite the FCC Order, Co~ncastalso attempts to re-litigate the merits of the Cornmission's decision to impose the news neighborhooding condition upon it, complaining that including Bloomberg TV ("BTV") in existing news neighborhoods is unwarranted and will be disruptive to programmers and consumers - an allegation that is not only unsupported by the facts but not even mentioned in the FCC Order. As will be demonstrated below, Comcast's "Chicken- Little" like warnings that the sky will fall if the Commission requires Comcast to abide by the condition are wildly exaggerated and belied by experience, Even more importantly, they have no place in this proceeding. On January 21,2011, Corncast (along with GE and NBCU) in a Commission fding "accept[ed] as binding the conditions and enforceable commitments included in the FCC Order] and expressly waive[d] any right they