2:52pm PT by Eriq Gardner
Game Show Network Tests FCC's Definition of Fair Competition
Is a television network that's best known for game shows being hampered by a cable ecosystem that's been rigged against fair competitions?
The question is now being addressed in a proceeding before the Federal Communications Commission, which is examining the plight of the Game Show Network, which offers such fare as Deal or No Deal and Family Feud as well as original programming like Idotest, Skin Wars and Lie Detectors. The media regulatory agency is examining whether Cablevision's repositioning of GSN from a wide tier to a premium sports tier amounted to program carriage discrimination in violation of Section 616 of the Communications Act of 1934.
This contest has been a long one.
GSN filed its complaint against Cablevision in 2011, when the FCC got tired of the often contentious negotiations between programmers and distributors on the tube and aimed to do something about it. Now, the latest buzz in television has advanced towards talking about the opportunities and tensions inherent in the unbundling of television content, but GSN and Cablevision continue to fight the good fight over how decisions to put networks into certain tiers on the cable dial can have big consequences to ratings, ad dollars and licensing revenue. In the past couple of weeks, the two sides have delivered arguments in advance of a summary decision. The FCC's coming ruling may be quite impactful in an industry where vertical consolidation always causes a big headache.
GSN argues that it was taken out of a more widely distributed tier that included WE tv and Wedding Central — two networks that feature "female-oriented" reality and competition-based programming. That's how GSN sees itself. By being placed into a premium sports tier that included "male-oriented" ESPN Classic, ESPN-U, MLB Network and the NHL Network, GSN says that many of its viewers didn't want to pay the extra fee and its ratings began to crater.
Cablevision allegedly had an ulterior motive in doing this because it wanted to benefit its own affiliated WE tv and Wedding Central networks.
The FCC ruled early on in the dispute that it wouldn't force Cablevision to immediately put GSN back into the basic tier while the dispute played out, but the agency did in 2012 find that GSN had established a prima facie case of program discrimination.
Two weeks ago, Cablevision brought a motion for summary decision that argued that GSN had to do more than allege being discriminated on the basis of affiliation. Cablevision told the FCC that the discriminatory conduct also had to be shown to have "unreasonably restrained the network's ability to compete fairly."
GSN says that standard that Cablevision looks to hold up — one that deals with competing fairly in the national marketplace — isn't exactly right. The question, GSN says, is whether it is able to fairly compete in Cablevision's local market of New York
"There cannot be a dispute that GSN meets that standard," said GSN in a filing to the FCC on Wednesday. "Not only has Cablevision’s conduct significantly inhibited GSN’s ability to reach viewers in Cablevision’s coverage area, but the conduct has had a significant impact on GSN’s license fee revenues, advertising revenues, and ability to compete for advertisers."
GSN also throws another charge against Cablevision. According to its filing, once GSN learned of the retiering, it attempted to negotiated and made an offer to return to broad distribution.
"Rather than reconsider its decision on the merits, Cablevision sought to extract value from DIRECTV, one of GSN’s parents, by insisting that DIRECTV give carriage to the fledgling Wedding Central," states GSN. "Cablevision’s attempt to leverage its power over GSN’s distribution to benefit its affiliated Wedding Central is a separate, independent violation of Section 616."
It's also worth noting that Cablevision is still involved in an antitrust lawsuit against Viacom for allegedly forcing it to pick up smaller networks by bundling them with "must-have" networks like like Nickelodeon, Comedy Central and MTV.