Wednesday, June 14, 2006

Comcast's special gift to Philadelphia?

To we Philadelphia sports fans who count ourselves as captive customers of Comcast, there always seems to be an awkward subtext in the way the company defends its most glaring use of market power: its refusal to share its dominant Philadelphia sports station, Comcast SportsNet, with its satellite competitors.

With the cable and Internet markets currently under scrutiny in Washington, Comcast had another chance today to explain its position. It came during a Senate Judiciary Committee hearing this morning on the future of telecommunications, when Chairman Arlen Specter asked his Philadelphia homeboy, David L. Cohen, how Comcast's sports programming would be affected by S. 2686, the omnibus telecommunications bill sponsored by Specter's colleague and fellow Republican, Sen. Ted Stevens of Alaska.

The Senate Commerce Committee is considering the bill, and Stevens is its chairman, so it stands as good a chance of passing this year as any telecommunications bill - which is not to say that it's a given, with some of the nation's most powerful companies pushing Congress in conflicting directions.

So far, most of the public debate has centered on two issues: "Internet neutrality," which the bill currently sidesteps by ordering an FCC study, and expedited local franchising for phone companies such as Verizon that want to compete with cable by offering television along with Internet and phone service, which the bill includes.

But the bill also includes a section known as the Sports Freedom Act, intended to prevent Comcast and its cable counterparts from monopolizing local sports telecasts through exclusive deals as Comcast has for years in Philadelphia.

Cohen, chief of staff to Ed Rendell when he was Philadelphia's mayor, is now making millions of dollars a year as Comcast's executive VP. As I know personally from my days on the Philadelphia Inquirer's city desk staff, Cohen is a true master of spin, able to put forward the best possible case for just about any point he argues. It can't hurt that he's probably the smartest guy in the room just about any place he shows up.

His talents were abundantly on display today as he addressed the big national issues. But when it came to SportsNet and Comcast's decision to keep it exclusive in Philadelphia, even Cohen couldn't escape the inevitable awkwardness.

Cohen started with the usual arguments - that Comcast withholds SportsNet because it's legal under the "terrestrial exemption" to the 1992 Cable Act's program-access rules; that it only withholds SportsNet from the satellite companies, not RCN in the small corner of the region it serves as a cable "overbuilder"; and that one of the satellite companies, DirecTV, has an exclusive deal with the National Football League for a package of out-of-town games known as the NFL Sunday Ticket, which Cohen called "the key and most important exclusive sports programming that exists today."

Then Cohen added one more justification - not for Comcast's practice, but for why Congress should, well, give it a pass: Philadelphia is the only market where Comcast keeps local sports away from its competitors.

That's true: Comcast offers satellite companies SportsNets in the Washington area, Chicago and San Francisco (although sometimes on terms that provoke other complaints from the satellite companies).

Cohen didn't bother to say why Comcast SportsNet in Philadelphia is an exception - only that its Philadelphia strategy "has not proved to be a dominant model." Then he added: "My submission to this committee would be that it is not something that rises to the level of the need for legislative reform of the program-access rules."

So that's Comcast's bottom line: We only treat our hometown sports this way, so leave us alone.

For another take on the Senate deliberations, see media activist Joshua Breitbart's blog. For a economics-savvy explanation why saying, "Yeah, but what about NLF Sunday Ticket?" invokes an apples-and-oranges comparison, see Ruby Legs' blog posting: Welcome to Phillyville: Comcast, the Great Equivocator.


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