Comcast wins appeals court victory in Tennis Channel dispute

Comcast Corp. is the Serena Williams of cable.

The nation’s largest cable operator with more than 21 million subscribers outlasted and out-muscled the tiny Tennis Channel to win a marathon legal dispute that went from the Federal Communications Commission to the Court of Appeals for the District of Columbia.

At issue was Tennis Channel’s desire to be carried in Comcast homes that get the Golf Channel and NBC Sports Network, both of which are owned by the cable giant. Comcast offered Tennis Channel in a more expensive sports package, thus limiting its reach and prospects for ratings and revenue.

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The Tennis Channel argued that Comcast was discriminating against the Tennis Channel by not giving it the same distribution as it does channels it owns.

The FCC agreed with the Tennis Channel but Comcast appealed and on Tuesday, the appeals court unanimously sided with Comcast.

”We are pleased the Court of Appeals correctly rejected the claim that we discriminated against Tennis Channel,” Comcast Vice President for Government Communications Sena Fitzmaurice said Tuesday in a statement. “Comcast’s decision to carry Tennis Channel was the product of legitimate business considerations, not affiliation.”

The appeals court, in its 51-page ruling, said the Tennis Channel and the FCC had failed to provide enough proof Comcast had shunted the channel to a less favorable location simply because Tennis Channel was not affiliated with Comcast.

“Without showing any benefit for Comcast from incurring the additional fees for assigning Tennis a more advantageous tier, the [FCC] has not provided evidence that Comcast discriminated against Tennis on the basis of affiliation,” the court wrote.

The Tennis Channel, which had been hoping for a big bounce in subscribers, expressed frustration and hinted it would appeal.

“While Tennis Channel appreciates the time and consideration that the Circuit Court has given to this important FCC Order, we’re disappointed with today’s decision and respectfully disagree,” the channel said in a statement.

“As a small, independent company defending ourselves against one of the world’s largest media conglomerates, we would love for this long process to be justly resolved and behind us,” the channel said. “However, Comcast’s clear pattern of discrimination against Tennis Channel in favor of the competing networks that it owns – as detailed at length by the FCC – warrants further review of the panel’s decision and we intend to seek that review.”

The legal match has been running since January 2010. Last year, the Federal Communications Commission sided with Tennis Channel and ordered Comcast to offer the Tennis Channel under the same conditions as it did the Golf Channel.

The FCC’s split decision last year, in favor of Tennis Channel, was unprecedented. It marked the first time that the government agency had ever found a cable operator in violation of the anti-discrimination laws.

Technically, Tuesday’s appeals court ruling stayed the FCC’s decision.

Comcast successfully argued that the Tennis Channel had agreed to be carried in the sports tier of channels when it negotiated a long-term contract with Comcast in 2005. Comcast also placed a winning shot by demonstrating that other big cable operators carried the Tennis Channel in their sports tiers, and that there was not enough consumer demand to warrant its inclusion in basic packages of channels.

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