FCC Rules Against AT&T, Upholds Cox' Exclusive Padres Telecasts

AT&T Has Complained Cox Refuses To Negotiate Rights To Padres Broadcasts

An FCC administrative ruling announced yesterday upheld Cox Communications' exclusive broadcasts of Padres games, ensuring that Padres fans "will continue to find them available only" from Cox and Time Warner Cable (TWC) this season, according to Jonathan Sidener of the SAN DIEGO UNION-TRIBUNE. Cox began broadcasting Padres home games on PPV in '84, and the company currently has "exclusive rights to produce and broadcast Padres games, which make up the bulk of the programming" on Channel 4 San Diego. But AT&T last year filed a complaint with the FCC alleging that Cox' exclusivity "violate[s] agency rules against unfair competition." AT&T in the complaint said that Cox "has refused to negotiate rights to the Padres broadcasts, a move that is 'exacting a severe toll on AT&T's (U-verse) subscription figures in San Diego.'" Cox licenses its Channel 4 content to TWC, and AT&T argued that Cox' refusal to "license Padres games for the U-verse service is clearly an anti-competitive move." AT&T said that the FCC "classifies local sports as 'must-have' content that cannot be withheld from competitors." But the FCC ruled that its competition rules, established by Congress, apply "only to programming transmitted over satellite and not to programming produced locally, a situation it calls the 'terrestrial loophole.'" FCC Senior Deputy Chief Steven Broeckaert in the decision wrote the agency has "significant concern" about the loophole. He noted that the FCC "began a review of its rules" in '07, and that the "ongoing review should take precedence over the individual complaint by AT&T." Broeckaert: "We find that rule-making process, and not the instant adjudication, to be the correct forum for determining these issues" (SAN DIEGO UNION-TRIBUNE, 3/10).

NOT OVER YET: AT&T Senior VP/Federal Regulatory Robert Quinn yesterday in an e-mail said that the company "will 'expeditiously' appeal the media bureau's decision to the full commission for review." Quinn: "Cox continues to violate the law by selling access to San Diego Padres baseball games only to video providers that do not directly compete with it, depriving consumers in San Diego of real competitive alternatives." Cox spokesperson David Grabert in an e-mail said, "Cox has been operating completely within its rights under the law to differentiate our services through the exclusive programming we deliver via Channel 4 San Diego, which we own and operate" (BLOOMBERG NEWS, 3/9).