FCC’s Media Bureau Splits Decision on Project Concord, NBCUniversal Arbitration
The FCC’s Media Bureau granted in part and denied in part a petition by Comcast’s NBCUniversal to review elements of an arbiter’s ruling (CD July 13 p11) on the amount of programming it must license to an fledgling online video distributor (OVD) under the terms of an FCC order approving Comcast’s buyout of NBCU. The bureau also denied a request by Project Concord (PCI) to recover its attorneys’ fees from NBCUniversal. The case is the first that has been brought to the FCC under the so-called “benchmark” condition of the Comcast-NBCU merger order that gave certain access rights to OVDs seeking to license NBCU-owned programming.
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The bureau rejected Comcast’s argument that the merger order excluded from the access provision all NBCUniversal films released within a year of an OVD seeking access to them, a public notice released Tuesday said (http://xrl.us/bnzojs). “These first-year films are included within the scope of the Benchmark Condition,” it said. Comcast declined to comment because it has not seen the full decision. Project Concord didn’t immediately respond to our query. The public notice said unredacted copies of the full decision had been given to outside counsel of both parties. But the decision won’t be published, or shared with the parties themselves, until their counsel has proposed redactions and the bureau has acted on the proposals, the notice said.
However, the bureau reversed the arbiter’s decision on another point. NBCUniversal had argued that it was prohibited from licensing certain programming to Project Concord because doing so would violate some of its other contracts. An arbiter found that NBCUniversal “failed to satisfy its burden of proof ... as to each of the third-party agreements which NBCU has identified.” The bureau disagreed and clarified the standard it used to reach such a conclusion. “The Media Bureau clarifies that the correct standard to be applied ... is whether NBCU has demonstrated by a preponderance of the evidence, based on the language of the relevant licensing agreements and evidence regarding the interpretation of that language,” that licensing programming to an OVD would “constitute a breach of contract ... provided that the agreement allegedly breached is ‘consistent with reasonable, common industry practice,'” the bureau’s public notice said.
Applying that standard, the bureau found that NBCU had demonstrated “by a preponderance of the evidence that licensing certain films and TV programs to PCI would constitute a breach of various NBCU licensing agreements,” the public notice said. The bureau also declined to award Project Concord attorneys’ fees in the dispute. “The Media Bureau concludes that NBCU did not engage in ‘unreasonable conduct’ during the course of the arbitration proceeding that would warrant grant of PCI’s request to shift its attorneys fees and other costs and expenses to NBCU,” the public notice said.
It’s good to see Comcast/NBCU being held to the terms of its merger agreement, said John Bergmayer, a senior staff attorney at Public Knowledge. “I can’t say I'm thrilled that Comcast can avoid making certain programming available through terms in exclusive contracts, but at least the burden lies with NBCU to show that any such exclusive contracts are ‘common industry practice,'” he said. “Of course, the current ‘common industry practice’ might not be the best practice for consumers or competition.”