3:02pm PT by Eriq Gardner
Judge Rules Cablevision Discriminated Against Game Show Network
Game Show Network can proclaim itself to be a winner after the FCC's chief administrative judge Richard Sippel found that Cablevision's repositioning of GSN from a wide tier to a premium sports tier in 2010 amounted to program carriage discrimination in violation of Section 616 of the Communications Act of 1934.
The Nov. 23 decision, which orders Cablevision to forfeit $400,000 to the government and bars the Altice-owned cable operator from further discriminating against GSN (jointly owned by Sony Pictures and AT&T's DirecTV), comes in year six of the dispute and was hardly the expected outcome.
In 2015, the parties engaged in a trial over a law that was intended to minimize anti-competitive activities while preserving the ability of aggressive negotiations in the television marketplace. That October, the FCC's Enforcement Bureau issued its recommendations to clear Cablevision of a complaint alleging wrongdoing.
But in a 65-page decision (read here), Sippel accepts GSN's contention that it was more like "women's networks" like WE tv and Wedding Central than the premium one.
Sippel writes that the reasons Cablevision offered for the retiering were pretextual.
Cablevision claimed that because it saved money and saw no meaningful increase in customer churn, the retiering was justified, but Sippel finds that contrary to the assertion that the retiering happened because GSN was a weak and unpopular network, the preponderance of evidence suggested otherwise.
The judge ultimately arrives at the conclusion that Cablevision exercised discriminatory conduct and restrained GSN's ability to compete fairly. As a result of the retiering, GSN lost 96 percent of Cablevision's 73.5 million subscribers and suffered substantial license fee and advertising revenue losses.
"GSN has proven through direct evidence that the retiering of GSN from the expanded basic tier to the premium sports tier was based on GSN’s non-affiliation with Cablevision," states the decision. "It is found that Cablevision, without any valid business reason, tagged GSN for retiering because GSN had an expired carriage agreement with Cablevision and Cablevision refused to negotiate a new contract. GSN proved that Cablevision, in its retiering decision, considered retiering only non-affiliated networks having expired or expiring contracts. Yet no consideration was given by Cablevision to retiering any of its affiliated networks, including those that also had expired or expiring carriage agreements. In its explanation, Cablevision claimed to be powerless to retier any of its affiliated networks — with or without expiring carriage agreements. Such an assertion is not credible because it is contradicted by substantial evidence."
Altice has indicted that it plans to appeal the decision.