Estrella Carriage Complaint Lacks Shred of Evidence, Comcast Says
Seeking alternative distribution method (ADM) language in carriage negotiations isn't the same as demanding ownership interest, said Comcast in an answer to Liberman Broadcasting's carriage complaint against it, to be posted in docket 16-121. Comcast also said Liberman isn't a video programming vendor (VPV) and thus has no standing to bring a carriage complaint; and the Liberman complaint is time-barred anyway. The complaint, filed in April, is seen facing tough odds of success (see 1604080013). If the FCC accepted its arguments, broadcasters would end up getting "two bites at the apple" in negotiations, one lawyer with cable clients told us, saying it would have been better served to file a good-faith negotiation complaint, though that would be tough to prove. Liberman's reply is due June 27.
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"Even if [Liberman] could overcome these fatal deficiencies (which it cannot), the Complaint does not make out a prima facie case because it contains nothing more than speculation that Comcast made its carriage decision concerning Estella TV on the basis of affiliation," Comcast said in its redacted 97-page filing, saying Liberman lacks "a shred of direct evidence" that the Comcast decision to not carry its Estrella TV Spanish-language network was based on a lack of affiliation "or as part of an effort to protect affiliated Spanish-language networks."
Comcast said having carried Estrella previously, its carriage decisions were driven largely by Nielsen and other viewing data 'that could not justify the fees [it] demanded," and it heard "muted reaction" from its Denver, Houston and Salt Lake City subscribers when it pulled the Estrella signal there. Comcast also said there was no statistically verifiable boost in viewership to affiliated channels Telemundo or NBC Universo in those markets once the Estrella signal was dropped.
While Liberman in its complaint asserted its status as a VPV, it "is wrong," Comcast said. Its claims it meets the statutory definition -- a creator, producer or wholesale distributor of video programming for sale -- ignores the context that the Cable Act set separate statutory regimes for cable networks and for broadcasters like Liberman, which have protections such as must-carry and transmission consent rules, not the program carriage regime. "No reasonable reading of the law and regulations permits a broadcaster ... to do what [Liberman] has done here: forgo must-carry, elect retransmission consent, take advantage of [a multichannel video programming distributor's] obligations to negotiate in good faith, and then resort to a Section 616 discrimination claim when those negotiations fail," Comcast said. It also said the Comcast/NBCUniversal order, while barring affiliation-based discrimination against VPVs, uses the same VPV definition as the FCC's carriage rules and excludes Liberman.
Comcast said its ADM proposal merely sought the ability to distribute Estrella programing digitally: "[Liberman] was free to reject Comcast's proposal and plainly did so [and] the parties' discussions broke down because of ... unprecedented and unmerited request for retransmission consent fees and increased distribution," not Comcast's digital distribution rights request.
The Comcast response "is predicated on a highly selective and inadequate version of the facts underlying this case, from which Comcast draws erroneous conclusions," Liberman said in a statement Wednesday. "Comcast relies on law as it wishes it to be, not as it is. [Liberman] is a quintessential Video Programming Vendor fully entitled to the protections afforded by the program carriage statute and regulations, as well as the FCC’s Comcast/NBCUniversal Merger Order."