DirecTV Asks FCC For Arbitration In Dispute With Comcast RSNs
By John Ourand, Staff Writer
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DirecTV will ask the FCC to use its arbitration process to resolve carriage disputes it is having with two Comcast RSNs. DirecTV sent Comcast a letter late yesterday declaring its intent, after failing to reach deals for CSN New England and CSN Bay Area -- two of the RSNs Comcast bought from Rainbow in May '07. The RSNs' carriage agreements with DirecTV ended at the end of '08. DirecTV executives say Comcast is seeking a 40% increase for CSN Bay Area, and a 25% increase for CSN New England. Derek Chang, DirecTV's Exec VP/Content Strategy and Development described the increases as "pretty ridiculous," and accused Comcast of abusing its market position. Chang is particularly irked by CSN Bay Area, pointing to the likelihood that the RSN will lose pro sports programming when it migrates A's and Sharks games to CSN California. "They want a 40 percent rate increase for the Bay Area, when it's losing 30 percent of its programming," Chang said. "How do you explain that?" Comcast said that it actually is increasing the number of sports it is showing if you take into account what's offered by both CSN Bay Area and CSN California; however, DirecTV is only out of contract with CSN Bay Area, not CSN California. Comcast said, "We continue to negotiate in good faith and have put a fair offer on the table that reflects the growing value of our networks, the investments we have made in them, and is reasonable based on market trends. As a company with several regional sports networks of their own, DirecTV should be familiar with the rising cost of sports and the negotiation process. We would prefer to resolve this at the negotiating table, but are prepared to proceed with the arbitration process because our goal has always been to serve our viewers without interruption."
Dispute Resolution: DirecTV has a right to take Comcast to arbitration under conditions the FCC imposed on the MSO in '06 when it joined Time Warner to buy Adelphia. The two sides immediately will enter a 15-day cooling off period before the arbitration process. "We've never really reached a point like this," Chang said. "I was shocked what they were asking for these networks, given the stance [Comcast Exec VP/Content Acquisition] Matt Bond takes on the other side of the table."
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