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No More Loopholes For Cable Companies

January 21, 2010

Cable TV operators, including Philadelphia-based Comcast, will no longer be able to withhold sporting events and other popular programming that they own from satellite providers and other rivals.

The Associated Press reports that the Federal Communications Commission voted 4-to-1 on Wednesday to eliminate the so-called “terrestrial loophole” in a 1992 federal cable law, which requires cable operators to give competitors access to cable-owned programming that is transmitted using satellite connections. Until now, the provision didn’t apply when the cable operators sent those programs over land-based networks instead.

Cable companies have been using the loophole, for instance, to keep the Flyers, Sixers and Phillies off DirecTV and Dish Network, as well as keeping San Diego Padres games off AT&T Inc.’s U-Verse video service.

“Consumers who want to switch video providers should not have to give up their favorite team in the process,” FCC Chairman Julius Genachowski said.

That sentiment was echoed by cable’s rivals.

“The FCC gave sports fans a reason to tailgate today by adopting rules to bring sports programming to more video providers,” AT&T Senior Vice President Bob Quinn said in a blog post. “Ultimately, this means consumers will have more choices in how and from who they receive programming they want.”

Satellite and phone companies have complained that big cable TV operators use the terrestrial loophole to deny them access to must-have programming, particularly popular sports programming.

Cox, for instance, currently uses the loophole to withhold Padres games from AT&T’s U-Verse.

Cablevision won’t let U-Verse or Verizon’s FiOS service carry the high-definition version of Cablevision’s Madison Square Garden networks, which show the games of the New York Knicks, Rangers and Islanders and the New Jersey Devils.

Comcast, meanwhile, does not provide its satellite competitors with access to its SportsNet Philadelphia channel, which carries games by the Philadelphia Flyers, Phillies and Sixers. Comcast, which has a controlling interest in the Sixers and Flyers, does provide the channel to Verizon and RCN Corp., which offers competing cable services in some markets.

Cablevision supplied RedOrbit with the following statement via email in response to the FCC ruling: “While we find the legal basis for the decision unfounded, we are pleased that the FCC recognized the value of Cablevision’s local programming strategy and investments. Verizon and AT&T will not receive an FCC bailout that will allow them to capture News 12, MSG Varsity and other programming that we have developed for our customers. We are also pleased that despite the phone companies’ overwhelming lobbying effort, the FCC has ensured a complaint process. If the phone companies complain that they are unable to compete, we are confident that we can prove that it is for a variety of reasons, none of which have to do with HD sports programming. Verizon and AT&T do not need a regulatory bailout in order to compete.”

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