Game Show Network, LLC v. Cablevision Systems Corp., 29637-29643 [2012-12146]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 77, Number 97 (Friday, May 18, 2012)]
[Notices]
[Pages 29637-29643]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12146]


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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 12-122; File No. CSR-8529-P; DA 12-739]


Game Show Network, LLC v. Cablevision Systems Corp.

AGENCY: Federal Communications Commission.

[[Page 29638]]


ACTION: Notice.

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SUMMARY: This document designates a program carriage complaint for 
hearing before an Administrative Law Judge (``ALJ'') to resolve the 
factual disputes and to return an Initial Decision.

DATES: Game Show Network, LLC (``GSN'') and Cablevision Systems Corp. 
(``Cablevision'') shall each file with the Chief, Enforcement Bureau 
and Chief ALJ, by May 21, 2012, its respective elections as to whether 
it wishes to proceed to Alternative Dispute Resolution (``ADR''). The 
hearing proceeding is suspended during this time. If only one party 
elects ADR and the other elects to proceed with an adjudicatory 
hearing, then the hearing proceeding will commence on May 22, 2012. In 
order to avail itself of the opportunity to be heard, GSN and 
Cablevision, in person or by their attorneys, shall each file with the 
Commission, by May 29, 2012, a written appearance stating that it will 
appear on the date fixed for hearing and present evidence on the issues 
specified herein.

ADDRESSES: Federal Communications Commission, 445 12th Street SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact David Konczal, David.Konczal@fcc.gov, of the Media 
Bureau, Policy Division, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
document, DA 12-739, adopted and released on May 9, 2012. The full text 
is available for public inspection and copying during regular business 
hours in the FCC Reference Center, Federal Communications Commission, 
445 12th Street SW., CY-A257, Washington, DC 20554. This document will 
also be available via ECFS (https://www.fcc.gov/cgb/ecfs/). Documents 
will be available electronically in ASCII, Word 97, and/or Adobe 
Acrobat. The complete text may be purchased from the Commission's copy 
contractor, 445 12th Street SW., Room CY-B402, Washington, DC 20554. To 
request this document in accessible formats (computer diskettes, large 
print, audio recording, and Braille), send an email to fcc504@fcc.gov 
or call the Commission's Consumer and Governmental Affairs Bureau at 
(202) 418-0530 (voice), (202) 418-0432 (TTY).

Synopsis of the Order

I. Introduction

    1. By the Hearing Designation Order and Notice of Opportunity for 
Hearing for Forfeiture (``Order''), the Chief, Media Bureau 
(``Bureau''), pursuant to delegated authority, hereby designates for 
hearing before an ALJ the above-captioned program carriage complaint 
filed by GSN against Cablevision. The complaint alleges that 
Cablevision, a vertically integrated multichannel video programming 
distributor (``MVPD''), discriminated against GSN, a video programming 
vendor, on the basis of affiliation, with the effect of unreasonably 
restraining GSN's ability to compete fairly, in violation of section 
616(a)(3) of the Communications Act of 1934, as amended (``the Act''), 
and Sec.  76.1301(c) of the Commission's Rules. The complaint arises 
from Cablevision's decision to move GSN from a basic tier to a premium 
sports tier, resulting in a loss of Cablevision subscribers for GSN.
    2. After reviewing GSN's complaint, we find that GSN has put forth 
sufficient evidence supporting the elements of its program carriage 
discrimination claim to establish a prima facie case. Below, we review 
the evidence from GSN's complaint establishing a prima facie case. 
While we rule on a threshold procedural issue regarding application of 
the program carriage statute of limitations, we do not reach the merits 
on any of the other issues discussed below.\1\ While we do not 
summarize each of Cablevision's counter-arguments below, our review of 
the existing record, including Cablevision's Answer and other 
pleadings, makes clear that there are substantial and material 
questions of fact as to whether Cablevision has engaged in conduct that 
violates the program carriage provisions of the Act and the 
Commission's rules. We therefore initiate this hearing proceeding. We 
direct the Presiding Judge to develop a full and complete record and to 
conduct a de novo examination of all relevant evidence in order to make 
an Initial Decision.
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    \1\ As set forth below, the following matters are not designated 
for the ALJ to resolve: (i) Whether GSN has put forth evidence in 
its complaint sufficient to warrant designation of this matter for 
hearing; and (ii) whether GSN's complaint was filed in accordance 
with the program carriage statute of limitations. As required by the 
Commission's Rules, to the extent Cablevision seeks Commission 
review of our decision on these issues, such review, if any, shall 
be deferred until exceptions to the Initial Decision in this 
proceeding are filed. See 47 CFR 1.115(e)(3).
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II. Background

    3. Section 616(a)(3) of the Act directs the Commission to establish 
rules governing program carriage agreements and related practices 
between cable operators or other MVPDs and video programming vendors 
that, among other things, ``prevent [an MVPD] from engaging in conduct 
the effect of which is to unreasonably restrain the ability of an 
unaffiliated video programming vendor to compete fairly by 
discriminating in video programming distribution on the basis of 
affiliation or nonaffiliation of vendors in the selection, terms, or 
conditions for carriage of video programming provided by such 
vendors.'' In implementing this statutory provision, the Commission 
adopted Sec.  76.1301(c) of its rules, which closely tracks the 
language of section 616(a)(3).
    4. The Commission has established specific procedures for the 
review of program carriage complaints. While those procedures provide 
for resolution on the basis of a complaint, answer, and reply, the 
Commission expected that, in most cases, it would be unable to resolve 
carriage complaints solely on the basis of a written record. Rather, it 
anticipated that the majority of complaints would require a hearing 
before an ALJ, given that alleged section 616 violations typically 
involve contested facts and behavior related to program carriage 
negotiations. In such cases, where the complainant is found to have 
established a prima facie case but disposition of the complaint 
requires the resolution of factual disputes or extensive discovery, the 
parties can elect either ADR or an adjudicatory hearing before an ALJ. 
If the parties proceed to a hearing before an ALJ, any party aggrieved 
by the ALJ's Initial Decision may file an appeal directly with the 
Commission. The appropriate relief for violation of the program 
carriage provisions is determined on a case-by-case basis. Available 
sanctions and remedies include forfeiture and/or mandatory carriage 
and/or carriage on terms revised or specified by the Commission. For 
purposes of our prima facie determination, we discuss below the factual 
bases for GSN's claim of program carriage discrimination.
    5. Cablevision is a cable operator that owns or manages cable 
systems serving more than 3.3 million subscribers, primarily in New 
York, New Jersey, and Connecticut.\2\ Both prior to and after its 
repositioning of GSN to a premium sports tier in February 2011, 
Cablevision has been affiliated with the WE tv and Wedding Central 
national cable networks.\3\ WE tv was launched in the

[[Page 29639]]

1990s as ``Romance Classics,'' rebranded in 2001 as ``WE: Women's 
Entertainment,'' and renamed WE tv in 2006. Cablevision states that WE 
tv features programming on topics of interest to women, including high-
profile, original series and specials, as well as off-network licensed 
dramas and comedies. Cablevision states that Wedding Central, which was 
launched in August 2009 and subsequently closed in July 2011, featured 
series, specials, and movies related to weddings, dating, and 
relationships. Cablevision has carried WE tv on an expanded basic tier 
since its launch and also carried Wedding Central on an expanded basic 
tier from its launch until its closing in July 2011.
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    \2\ Cablevision is an MVPD as defined in Sec.  76.1300(d) of the 
Commission's Rules. See 47 CFR 76.1300(d).
    \3\ Prior to July 2011, Cablevision wholly owned WE tv and 
Wedding Central. On June 30, 2011, Cablevision spun off WE tv and 
Wedding Central into a new company, AMC Networks, Inc. GSN notes 
that Cablevision and AMC Networks are ``affiliated'' pursuant to the 
cable attribution rules because they share a common controlling 
shareholder (the Dolan family) and thus are under common control.
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    6. GSN is a national cable network launched on December 1, 1994 
under the name ``Game Show Network,'' \4\ which was subsequently 
rebranded in 2004 as ``GSN.'' GSN characterizes itself as a ``general 
interest network that features extensive female-oriented original 
programming (much, but not all of it, consisting of games of skill and 
chance and reality programs of various kinds), which typically accounts 
for more than 80% of its primetime schedule.'' GSN's predecessor and 
Cablevision entered into an affiliation agreement. Cablevision claims 
that it did not believe that GSN's programming had the potential to add 
significant value to Cablevision's existing channel lineups, but it was 
willing to agree to a deal if GSN was willing to provide Cablevision 
certain favorable terms. One of these favorable terms provided 
Cablevision with ``carriage flexibility.'' For almost 14 years (June 
1997-February 2011), Cablevision distributed GSN on an expanded basic 
tier.
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    \4\ Sony Pictures Entertainment, Inc. and DIRECTV have ownership 
interests in GSN. GSN states that it is a video programming vendor 
as defined in Sec.  76.1300(e) of the Commission's Rules.
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    7. On December 3, 2010, Cablevision notified GSN that Cablevision 
would reposition GSN from an expanded basic tier to a premium sports 
tier effective February 1, 2011. Cablevision claims that its decision 
was based on its efforts to find programming cost savings and that GSN 
was a good candidate for repositioning because, among other things, (i) 
GSN had historically received low viewership among Cablevision 
subscribers; and (ii) GSN, as a general family entertainment network, 
did not offer anything unusual to attract a particular segment of 
viewers. GSN's attempts to persuade Cablevision to reverse its decision 
were unsuccessful. Cablevision moved GSN to the premium sports tier on 
February 1, 2011.\5\ As a result of the repositioning, GSN's 
Cablevision subscribers fell.
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    \5\ Specifically, Cablevision repositioned GSN to its ``iO 
Sports and Entertainment Pak,'' for which subscribers must pay a fee 
of $6.95 per month in addition to the fees for purchasing an entry-
level package of digital cable programming and a digital cable box. 
In addition to GSN, this premium sports tier includes the following 
networks: ESPN Classic, ESPN-U, MLB Network, NHL Network, TVG 
Network (horseracing), FUEL-TV (extreme sports), FCS Pacific (West 
Coast collegiate conferences), FCS Central (Midwest collegiate 
conferences), FCS Atlantic (East Coast collegiate conferences), 
Outdoor Channel, Versus, Go1TV (soccer), Golf Channel, MavTV, CBS 
College Sports, Big Ten, NBA TV, FOX Soccer Plus, Sportsman Channel, 
Neo Cricket, and Fight Now TV.
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    8. Pursuant to Sec.  76.1302(b) of the Commission's rules, GSN 
provided Cablevision with its pre-filing notice on September 26, 2011. 
On October 12, 2011, GSN filed its Complaint as well as a Petition for 
Temporary Relief asking the Commission to order Cablevision to restore 
GSN to basic tier carriage while GSN's program carriage complaint is 
pending. On December 7, 2011, the Bureau denied the Petition, finding 
that GSN had failed to satisfy its burden of demonstrating that interim 
relief was warranted.

III. Discussion

    9. Based on our review of the complaint and as explained more fully 
below, we conclude that GSN has established a prima facie case of 
program carriage discrimination pursuant to section 616(a)(3) of the 
Act and Sec.  76.1301(c) of the Commission's Rules. When filing a 
program carriage complaint, the video programming vendor carries the 
burden of proof to establish a prima facie case that the defendant MVPD 
has engaged in behavior prohibited by section 616 and the Commission's 
implementing rules. In previous cases assessing whether a complainant 
has established a prima facie case of program carriage discrimination, 
the Bureau has considered whether the complaint contains sufficient 
evidence to support the elements of a program carriage discrimination 
claim.
    10. As an initial matter, all complaints alleging a violation of 
any of the program carriage rules must contain evidence that (i) the 
complainant is a video programming vendor as defined in section 616(b) 
of the Act and Sec.  76.1300(e) of the Commission's Rules or an MVPD as 
defined in section 602(13) of the Act and Sec.  76.1300(d) of the 
Commission's Rules; and (ii) the defendant is an MVPD as defined in 
section 602(13) of the Act and Sec.  76.1300(d) of the Commission's 
Rules. A prima facie case of discrimination ``on the basis of 
affiliation or nonaffiliation'' can be based on direct evidence or 
circumstantial evidence or both. A complaint relying on direct evidence 
requires documentary evidence or testimonial evidence (supported by an 
affidavit from a representative of the complainant) that supports the 
claim that the defendant discriminated on the basis of affiliation or 
non-affiliation of vendors. A complaint relying on circumstantial 
evidence requires (i) evidence that the complainant provides video 
programming that is similarly situated to video programming provided by 
a programming vendor affiliated with the defendant MVPD, based on a 
combination of factors, such as genre, ratings, license fee, target 
audience, target advertisers, target programming, and other factors; 
and (ii) evidence that the defendant MVPD has treated the video 
programming provided by the complainant differently than the similarly 
situated video programming provided by the programming vendor 
affiliated with the defendant MVPD with respect to the selection, 
terms, or conditions for carriage. Regardless of whether the complaint 
relies on direct or circumstantial evidence of discrimination ``on the 
basis of affiliation or nonaffiliation,'' the complaint must also 
contain evidence that the defendant MVPD's conduct has the effect of 
unreasonably restraining the ability of the complainant to compete 
fairly.\6\
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    \6\ In previous cases, the Media Bureau has made this assessment 
based on the impact of the defendant MVPD's adverse carriage action 
on the programming vendor's subscribership, licensee fee revenues, 
advertising revenues, ability to compete for advertisers and 
programming, and ability to realize economies of scale.
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    11. The parties do not dispute that GSN is a video programming 
vendor \7\ and that Cablevision is an MVPD as defined in the Act and 
the Commission's Rules.\8\ In addition, Cablevision does not contest 
that it was affiliated with the WE tv and Wedding Central cable 
networks pursuant to the Commission's attribution rules when it 
repositioned GSN to a premium sports tier in February 2011. With 
respect to the remaining factors, we conclude that GSN has put forth 
sufficient circumstantial evidence in its complaint to establish a 
prima facie case that Cablevision has engaged in unlawful 
discrimination in the ``selection of * * * video programming'' by

[[Page 29640]]

repositioning GSN to a premium sports tier, while carrying comparable 
affiliated networks on a more widely distributed tier.\9\ We do not 
reach the merits of this claim. Rather, we find that the existing 
record, including Cablevision's Answer, makes clear that there are 
significant and material questions of fact warranting resolution at 
hearing.\10\
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    \7\ See 47 U.S.C. 536(b) (defining ``video programming 
vendor''); 47 CFR 76.1300(e) (same).
    \8\ See 47 U.S.C. 522(13) (defining ``MVPD''); 47 CFR 76.1300(d) 
(same).
    \9\ 47 U.S.C. 536(a)(3). As discussed below, GSN does not 
contend that its affiliation agreement with Cablevision contains 
discriminatory ``terms'' or ``conditions.'' Rather, GSN claims that 
Cablevision has impermissibly discriminated in its ``selection'' of 
GSN for placement on a premium sports tier while selecting its 
affiliated networks for placement on a more widely distributed 
programming tier. See Tennis Channel HDO, 25 FCC Rcd 14149 (MB 2010) 
(program carriage complaint alleging that defendant impermissibly 
discriminated by selecting complainant for placement on sports tier 
while selecting affiliated networks for placement on a more widely 
distributed programming tier); NFL Enterprises HDO, 23 FCC Rcd 14787 
(MB 2008) (same).
    \10\ Because we are not ruling on the merits of GSN's claims at 
this prima facie stage, we find it premature to address 
Cablevision's argument that requiring Cablevision to reposition GSN 
back to an expanded basic tier would infringe upon Cablevision's 
First Amendment rights.
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A. Procedural Issues
    12. As a threshold matter, we reject Cablevision's contention that 
GSN's complaint is foreclosed as untimely filed under the program 
carriage statute of limitations. Pursuant to Sec.  76.1302(f) of the 
Commission's Rules, an aggrieved programmer has a one-year period in 
which to file a program carriage complaint that commences upon the 
occurrence of one of three specified events. We find that the third of 
those triggering events--the provision of an aggrieved programmer's 
pre-filing notification pursuant to Sec.  76.1302(b) of the 
Commission's Rules--is present in this case.\11\ The plain language of 
the rule allows a program carriage complaint to be filed within one 
year of the pre-filing notice. As the Commission and the Bureau have 
recognized previously, Sec.  76.1302(f)(3) could be read to allow a 
complainant to file a program carriage complaint based on allegedly 
unlawful conduct that occurred years before the submission of the pre-
filing notice provided the complaint was filed within one year of the 
pre-filing notice. We are not presented with such a case here. 
Cablevision informed GSN on December 3, 2010 that it would reposition 
the network to a premium sports tier and it subsequently took this 
allegedly impermissible discriminatory action on February 1, 2011. GSN 
filed its program carriage complaint on October 12, 2011, within one 
year of these dates, as well as within one year of its pre-filing 
notice. Accordingly, we conclude that the complaint was timely filed 
pursuant to Sec.  76.1302(f)(3) of the Commission's Rules.\12\
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    \11\ We agree with Cablevision that the limitations period in 
Sec.  76.1302(f)(2) of the Commission's Rules, which governs 
carriage offers unrelated to existing affiliation agreements, is 
inapplicable in this case.
    \12\ Similarly, in the Tennis Channel HDO, NFL Enterprises HDO, 
and MASN II HDO, the complainant filed its complaint within one year 
of the pre-filing notice as well as within one year of the allegedly 
impermissible discriminatory act. Tennis Channel HDO, 25 FCC Rcd 
14149, 14154-56, para. 11 (MB 2010); NFL Enterprises HDO, 23 FCC Rcd 
at 14819-20, paras. 69-70 (MB 2008); MASN II HDO, 23 FCC Rcd at 
14833-35, paras. 102-105 (MB 2008). In the 2011 Program Carriage 
NPRM, the Commission acknowledged that Sec.  76.1302(f)(3) could be 
read to provide that a complaint is timely filed even if the 
allegedly discriminatory act occurred many years before the filing 
of the complaint and that, based on such a reading, ``Section 
76.1302(f)(3) undermines the fundamental purpose of a statute of 
limitations `to protect a potential defendant against stale and 
vexatious claims by ending the possibility of litigation after a 
reasonable period of time has elapsed.' '' Revision of the 
Commission's Program Carriage Rules, Notice of Proposed Rulemaking, 
26 FCC Rcd 11494, 11522-23, para. 38 (2011) (``2011 Program Carriage 
NPRM'') (quoting Bunker Ramo Corp., Memorandum Opinion and Order, 31 
FCC 2d 449, para. 12 (Review Board 1971)). To address this concern, 
the Commission ``propose[d] to revise our program carriage statute 
of limitations to provide that a complaint must be filed within one 
year of the act that allegedly violated the program carriage 
rules.'' 2011 Program Carriage NPRM, 26 FCC Rcd at 11523, para. 39. 
GSN's complaint would be timely even under the Commission's proposed 
revised program carriage statute of limitations.
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    13. We disagree with Cablevision that GSN's complaint is barred by 
Sec.  76.1302(f)(1) of the Rules, which establishes a one-year period 
for the filing of a program carriage complaint that commences with the 
``[execution of] a contract with [an MVPD] that a party alleges to 
violate one or more of the [program carriage] rules.'' \13\ Although 
the parties executed and extended their existing carriage agreement 
well over one year ago, GSN does not claim that this agreement contains 
unlawfully discriminatory prices, terms, or conditions. Nor do the 
parties dispute that Cablevision has abided by the explicit terms of 
the agreement. The agreement at issue does not specify the tier on 
which Cablevision must carry GSN. The gravamen of GSN's complaint is 
that Cablevision exercised this discretion in an impermissibly 
discriminatory manner by repositioning GSN to a premium sports tier 
while at the same time continuing to carry its allegedly similarly 
situated affiliated networks on a more widely distributed tier, and has 
thus failed to meet its obligation under section 616(a)(3) of the Act 
and Sec.  76.1301(c) of the Commission's Rules to avoid discrimination 
on the basis of affiliation. It is this allegedly discriminatory act of 
repositioning of GSN, not the terms of the contract, which forms the 
basis for GSN's complaint.
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    \13\ The timeliness of GSN's complaint is not an issue 
designated for resolution by the Presiding Judge. As required by the 
Commission's Rules, to the extent Cablevision seeks Commission 
review of our decision on this issue, such review, if any, shall be 
deferred until exceptions to the Initial Decision in this proceeding 
are filed. See 47 CFR 1.115(e)(3).
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    14. This interpretation is consistent with Bureau precedent 
establishing that, despite the execution of a carriage contract more 
than one year prior to the filing of a program carriage complaint, the 
complaint may nonetheless be timely if the basis for the claim is an 
allegedly discriminatory decision made by the MVPD, such as tier 
placement, that the contract left to the MVPD's discretion. The 
exercise of such discretion is subject to the MVPD's obligations under 
the program carriage statute, which prohibits an MVPD from 
``discriminating in video programming distribution on the basis of 
affiliation or nonaffiliation of vendors in the selection, terms, or 
conditions for carriage * * *.'' As the Bureau explained in the NFL 
Enterprises HDO, ``[w]hether or not [an MVPD] had the right to [make a 
tiering decision] pursuant to a private agreement is not relevant to 
the issue of whether doing so violated section 616 of the Act and the 
program carriage rules. Parties to a contract cannot insulate 
themselves from enforcement of the Act or our rules by agreeing to acts 
that violate the Act or rules.'' \14\ As in the Tennis Channel HDO, NFL 
Enterprises HDO, and MASN II HDO, we designate the present case for a 
hearing to determine whether Cablevision exercised its discretion 
consistent with its obligations under the program carriage statute and 
rules when it repositioned GSN to a premium sports tier.
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    \14\ NFL Enterprises HDO, 23 FCC Rcd at 14821, para. 72 (MB 
2008). Subsequent to the Bureau's decision in NFL Enterprises HDO, 
the Chief ALJ supported this view in denying a motion for a ruling 
on judicial estoppel and laches issues. See NFL Enters. LLC v. 
Comcast Cable Communications, LLC, Memorandum Opinion and Order, FCC 
09M-36 (Chief ALJ 2009), at para. 3.
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    15. This precedent is consistent with the decision of the Cable 
Services Bureau in EchoStar dismissing a program access case on 
procedural grounds.\15\ The contract at issue in EchoStar specified the 
rate the complainant would pay for the defendant's programming. Over 
one year after the parties entered into the contract, however, the 
complainant sought to renegotiate the rate set forth in

[[Page 29641]]

the contract. The Bureau found that the complaint was barred by the 
applicable statute of limitations, which requires that program access 
complaints be brought within one year of the date of execution of an 
affiliation agreement that allegedly violates the Commission's program 
access requirements. Thus, unlike the present case where the contract 
at issue does not specify the tier on which Cablevision will carry GSN 
and instead leaves tier placement to Cablevision's discretion, EchoStar 
involved a complainant's attempt to renegotiate a rate set forth in the 
contract more than one year after the contract's execution date. Here, 
GSN's complaint does not relate to any of the specific rates, terms, or 
conditions set forth in the parties' contract, but rather, 
Cablevision's allegedly discriminatory tiering decision that occurred 
subsequent to the contract's execution.
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    \15\ See EchoStar Communications Corp. v. Fox/Liberty Networks, 
LLC, 13 FCC Rcd 21841 (CSB 1998), recon. denied, EchoStar 
Communications Corp. v. Fox/Liberty Networks, LLC, 14 FCC Rcd 10480 
(CSB 1999).
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    16. Notwithstanding this clear Bureau precedent, Cablevision argues 
that GSN should have filed its complaint within one year of the 
contract execution date. We disagree. Under Cablevision's 
interpretation of the program carriage statute of limitations, a 
programmer would be forever barred from bringing a discrimination claim 
unless the claim is brought within one year from the date the contract 
was executed. Such an interpretation would preclude programmers from 
bringing program carriage discrimination claims after the first year of 
a contract even if the MVPD exercises its discretion pursuant to the 
contract by moving the programmer to a less-distributed tier in order 
to favor its own affiliated network. Such an interpretation would allow 
even blatant affiliation-based discrimination to go unremediated, 
provided the defendant waits at least one year before taking the 
discriminatory action. Moreover, we note that Cablevision characterizes 
the pertinent term of the contract as ``favorable'' to Cablevision and 
that it sought such terms in particular from ``new networks that were 
seeking to grow subscribers in the New York DMA.'' Under Cablevision's 
interpretation of the program carriage statute of limitations, MVPDs 
could use their leverage over ``new networks'' to extract ``favorable'' 
terms that circumvent the protections provided by the program carriage 
statute. Under Cablevision's view of the program carriage statute of 
limitations, an MVPD could delete an unaffiliated network from all of 
its systems one year after the execution of the contract in order to 
favor its affiliated network and then claim that such conduct cannot be 
challenged under the program carriage rules because it occurred outside 
of the one-year window for filing a complaint. We find this view 
untenable as it would eviscerate the protections provided by the 
program carriage statute.
B. Discrimination Claim
1. Circumstantial Evidence
a. Similarly Situated
    17. We find that GSN has provided evidence sufficient to 
demonstrate for purposes of establishing a prima facie case of program 
carriage discrimination that it is similarly situated with Cablevision-
affiliated networks--WE tv and Wedding Central. As discussed above, a 
complaint relying on circumstantial evidence of discrimination ``on the 
basis of affiliation or nonaffiliation'' requires evidence that the 
complainant provides video programming that is similarly situated to 
video programming provided by a programming vendor affiliated with the 
defendant MVPD, based on a combination of factors, such as genre, 
ratings, license fee, target audience, target advertisers, target 
programming, and other factors.\16\ In its complaint, GSN provides 
evidence with respect to the following factors: Genre, ratings (on a 
national basis and within the New York DMA, as well as among specific 
demographic groups), license fee, target audience, competition for 
viewers (including audience duplication data), and competition for 
advertisers. (Cablevision disputes that GSN is similarly situated to WE 
tv and Wedding Central.)
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    \16\ The Commission has also emphasized that ``[a]lthough no 
single factor is necessarily dispositive, the more factors that are 
found to be similar, the more likely the programming in question 
will be considered similarly situated to the affiliated 
programming.'' 2011 Program Carriage Order, 26 FCC Rcd at 11504-05, 
para. 14.
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b. Differential Treatment
    18. We also find that GSN has put forth evidence sufficient to 
demonstrate for purposes of establishing a prima facie case of program 
carriage discrimination that Cablevision has treated GSN differently 
``on the basis of affiliation or nonaffiliation'' from Cablevision's 
similarly situated, affiliated networks. Cablevision distributes its 
affiliated WE tv network on an expanded basic tier, and such 
subscribers need not pay an additional fee to receive this programming 
network. Cablevision also distributed its affiliated Wedding Central 
network on an expanded basic tier, although GSN states that no other 
major distributor provided Wedding Central with this level of 
distribution. By contrast, Cablevision customers wishing to receive GSN 
must subscribe to the ``iO Sports and Entertainment Pak,'' for which 
subscribers must pay a fee of $6.95 per month in addition to the fees 
for purchasing an entry-level package of digital cable programming and 
a digital cable box. In addition, GSN claims that Cablevision places 
all of its affiliated cable networks (American Movie Classics (AMC), 
Fuse, Independent Film Channel, WE tv), including its affiliated sports 
network (MSG), on a highly penetrated tier, whereas Cablevision's 
premium sports tier is occupied only by unaffiliated networks. 
(Cablevision argues that its differential treatment of GSN is justified 
by various legitimate and non-discriminatory reasons.)
c. Harm to Ability To Compete Fairly
    19. GSN has put forth evidence sufficient to demonstrate for 
purposes of establishing a prima facie case of program carriage 
discrimination that Cablevision's decision to reposition GSN to a 
premium sports tier and its disparate treatment of the network have 
unreasonably restrained GSN's ability to compete fairly. GSN claims 
that all of the harms resulting from the repositioning of GSN to a 
premium sports tier have ``constrain[ed] GSN's ability to continue to 
grow--to develop itself as a network, to make adequate investments in 
content, promotion, and marketing, and to engage staff and talent--
making it more difficult for GSN to compete effectively against other 
networks, including its competitor WE tv.'' In its complaint, GSN 
provides the following evidence of how Cablevision's repositioning of 
GSN to a premium sports tier and its disparate treatment of the network 
have unreasonably restrained GSN's ability to compete fairly: (i) Loss 
of subscribers from repositioning results in reduced license fee 
revenue; (ii) loss of subscribers from repositioning results in reduced 
advertising revenue; (iii) loss of subscribers from repositioning 
impairs GSN's ability to compete for advertisers; (iv) placement on a 
premium sports tier impairs GSN's ability to compete for viewers; and 
(v) placement on a premium sports tier impairs GSN's ability to secure 
distribution agreements. (Cablevision disputes that GSN has been 
unreasonably restrained in its ability to compete fairly.)
2. Direct Evidence
    20. In addition to circumstantial evidence, GSN also provides what 
it claims to be direct evidence of discrimination ``on the basis of 
affiliation or nonaffiliation.'' Specifically, GSN provides a 
declaration

[[Page 29642]]

from Derek Chang, Executive Vice President of Content Strategy and 
Development at DIRECTV and representative of DIRECTV on GSN's board of 
directors, setting forth the following facts regarding carriage 
negotiations with Cablevision. On December 3, 2010, Cablevision 
notified GSN that Cablevision would reposition GSN to a sports tier 
effective February 1, 2011. After receiving this notification, GSN's 
CEO asked Mr. Chang to contact Cablevision's Chief Operating Officer 
(``COO'') to persuade Cablevision to reconsider. In response to Mr. 
Chang's inquiry, Cablevision's COO asked Mr. Chang to speak with Josh 
Sapan, President and COO of Cablevision's programming subsidiary, 
Rainbow Media Holdings (``Rainbow''). Mr. Chang states that, during his 
conversations with Mr. Sapan and other Rainbow staff, ``it was made 
clear to me that Cablevision would consider continuing GSN's broad 
distribution on Cablevision's systems if DIRECTV would consider giving 
distribution to Cablevision's new service, Wedding Central.'' Mr. Chang 
declined because DIRECTV had previously decided that Wedding Central 
did not merit distribution on DIRECTV.
3. Conclusion
    21. Based on the foregoing, we find it appropriate to designate the 
captioned complaint on the issues specified below for a hearing before 
an ALJ.\17\ While we question whether GSN's alleged direct evidence of 
discrimination, standing alone, is sufficient to establish a prima 
facie case, we need not address this issue because GSN has put forth 
sufficient circumstantial evidence of discrimination ``on the basis of 
affiliation or nonaffiliation'' to warrant referral of this matter to 
an ALJ. We emphasize that our determination that GSN has offered 
sufficient evidence on each required element to meet the threshold for 
establishing a prima facie case does not mean that we have found each 
evidentiary proffer set forth above necessarily persuasive, nor have we 
weighed GSN's evidence in light of rebuttal evidence offered by 
Cablevision. At hearing, the ALJ will be able to fully weigh all 
evidence offered by the parties.
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    \17\ The question of whether GSN has put forth evidence 
sufficient to warrant designation of this matter for hearing is not 
an issue before the Presiding Judge. As required by the Commission's 
Rules, to the extent Cablevision seeks Commission review of our 
decision on this issue, such review, if any, shall be deferred until 
exceptions to the Initial Decision in this proceeding are filed. See 
47 CFR 1.115(e)(3).
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4. Referral to ALJ or ADR
    22. Pursuant to Sec.  76.7(g)(2) of the Commission's Rules, each 
party will have ten days following release of this Order to notify the 
Chief, Enforcement Bureau and Chief ALJ, in writing, of its election to 
resolve this dispute through ADR. The hearing proceeding will be 
suspended during this ten-day period. In the event that both parties 
elect ADR, the hearing proceeding will remain suspended, and the 
parties shall update the Chief, Enforcement Bureau and Chief ALJ on the 
first of each month, in writing, on the status of the ADR process. If 
both parties elect ADR but fail to reach a settlement, the parties 
shall promptly notify the Chief, Enforcement Bureau and Chief ALJ in 
writing, and the proceeding before the ALJ will commence upon the 
receipt of such notification. If both parties elect ADR and reach a 
settlement, the parties shall promptly notify the Chief, Enforcement 
Bureau, Chief ALJ, and Chief, Media Bureau in writing, and the hearing 
designation will be terminated upon the Media Bureau's order dismissing 
the complaint becoming a final order. If only one party elects ADR and 
the other elects to proceed with an adjudicatory hearing, then the 
hearing proceeding will commence the day after the ten-day period has 
lapsed.
    23. Notwithstanding our determination that GSN has made out a prima 
facie case of program carriage discrimination by Cablevision, we direct 
the Presiding Judge to develop a full and complete record in the 
instant hearing proceeding and to conduct a de novo examination of all 
relevant evidence in order to make an Initial Decision on each of the 
outstanding factual and legal issues. In addition, we direct the 
Presiding Judge to make all reasonable efforts to issue his Initial 
Decision on an expedited basis.\18\ In furtherance of this goal, the 
Presiding Judge may consider placing limitations on the extent of 
discovery to which the parties may avail themselves.
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    \18\ In the 2011 Program Carriage Order, the Commission adopted 
a rule directing the ALJ to release an initial decision within 240 
calendar days after one of the parties informs the Chief ALJ that it 
elects not to pursue ADR or, if the parties have mutually elected to 
pursue ADR, within 240 calendar days after the parties inform the 
Chief ALJ that they have failed to resolve their dispute through 
ADR. See 2011 Program Carriage Order, 26 FCC Rcd at 11509-10, para. 
21; see also 47 CFR 0.341(f). While this rule does not apply to this 
complaint, we encourage the ALJ to make all reasonable efforts to 
comply with this deadline. Pursuant to Sec.  76.10(c)(2) of the 
Commission's Rules, a party aggrieved by the ALJ's decision on the 
merits may appeal such decision directly to the Commission in 
accordance with Sec. Sec.  1.276(a) and 1.277(a) through (c) of the 
Commission's Rules. 47 CFR 76.10(c)(2).
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IV. Ordering Clauses

    24. Accordingly, it is ordered, that pursuant to section 409(a) of 
the Communications Act of 1934, as amended, 47 U.S.C. 409(a), and 
Sec. Sec.  76.7(g) and 1.221 of the Commission's Rules, 47 CFR 76.7(g), 
1.221, the captioned program carriage complaint filed by Game Show 
Network, LLC against Cablevision Systems Corporation is Designated for 
Hearing at a date and place to be specified in a subsequent order by an 
Administrative Law Judge upon the following issues:
    (a) To determine whether Cablevision has engaged in conduct the 
effect of which is to unreasonably restrain the ability of GSN to 
compete fairly by discriminating in video programming distribution on 
the basis of the complainant's affiliation or non-affiliation in the 
selection, terms, or conditions for carriage of video programming 
provided by GSN, in violation of section 616(a)(3) of the Act and/or 
Sec.  76.1301(c) of the Commission's Rules; and
    (b) In light of the evidence adduced pursuant to the foregoing 
issue, to determine whether Cablevision should be required to carry GSN 
on its cable systems on a specific tier or to a specific number or 
percentage of Cablevision subscribers and, if so, the price, terms, and 
conditions thereof; and/or whether Cablevision should be required to 
implement such other carriage-related remedial measures as are deemed 
appropriate.
    25. It is further ordered, that pursuant to section 4(i) of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), and Sec.  
76.7(g)(2) of the Commission's Rules, 47 CFR 76(g)(2), GSN and 
Cablevision shall each file with the Chief, Enforcement Bureau and 
Chief ALJ, by May 21, 2012, its respective elections as to whether it 
wishes to proceed to Alternative Dispute Resolution. The hearing 
proceeding is hereby suspended during this time. If only one party 
elects ADR and the other elects to proceed with an adjudicatory 
hearing, then the hearing proceeding will commence on May 22, 2012. If 
both parties elect ADR, the hearing proceeding will remain suspended, 
and GSN and Cablevision shall update the Chief, Enforcement Bureau and 
Chief ALJ on the first of each month, in writing, on the status of the 
ADR process. Such updates shall be provided in writing and shall 
reference the MB docket number and file number assigned to this 
proceeding.

[[Page 29643]]

    26. It is further ordered that, pursuant to section 4(i) of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), in order to 
avail itself of the opportunity to be heard, GSN and Cablevision, in 
person or by their attorneys, shall each file with the Commission, by 
May 29, 2012, a written appearance stating that it will appear on the 
date fixed for hearing and present evidence on the issues specified 
herein, provided that, if both parties elect ADR, each party shall file 
such written appearance within five calendar days after notifying the 
Chief, Enforcement Bureau and Chief ALJ that it has failed to settle 
the dispute through ADR.\19\
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    \19\ In the 2011 Program Carriage Order, the Commission adopted 
a specific deadline for filing written appearances in a program 
carriage complaint proceeding referred to an ALJ for an initial 
decision. See 2011 Program Carriage Order, 26 FCC Rcd at 11510-11, 
para. 22; see also 47 CFR 1.221(h)(1). This rule does not apply to 
this complaint. Thus, the general rule in Sec.  1.221(c) applies. 
See 47 CFR 1.221(c). In light of the expedited basis of this hearing 
proceeding, the deadline for filing written appearances set forth in 
Sec.  1.221(c) of the Commission's Rules, 47 CFR 1.221(c), is waived 
and replaced with the deadlines set forth above. In addition, Sec.  
1.221(f) of the Commission's Rules, 47 CFR 1.221(f), provides that a 
``fee must accompany each written appearance filed with the 
Commission in certain cases designated for hearing.'' However, 
neither the Act nor our rules specify a fee for hearings involving 
program carriage complaints. See 47 CFR 1.1104; see also 47 U.S.C. 
158. Accordingly, neither GSN nor Cablevision is required to pay a 
fee in connection with the filing of their respective appearances in 
this proceeding.
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    27. It is further ordered that, if GSN fails to file a written 
appearance by the deadline specified above, or fails to file prior to 
the deadline either a petition to dismiss the above-captioned 
proceeding without prejudice, or a petition to accept, for good cause 
shown, a written appearance beyond such deadline, the Administrative 
Law Judge shall dismiss the above-captioned program carriage complaint 
with prejudice for failure to prosecute and shall terminate this 
proceeding.
    28. It is further ordered that, if Cablevision fails to file a 
written appearance by the deadline specified above, or fails to file 
prior to the deadline a petition to accept, for good cause shown, a 
written appearance beyond such deadline, its opportunity to present 
evidence at hearing will be deemed to have been waived. If the hearing 
is so waived, the Presiding Judge expeditiously shall terminate this 
hearing proceeding and certify to the Commission the above-captioned 
program carriage complaint for resolution based on the existing record.
    29. It is further ordered that in addition to the resolution of 
issues (a) and (b) in paragraph 39 above, the Presiding Judge shall 
also determine, pursuant to section 503(b) of the Communications Act of 
1934, as amended, whether an Order for Forfeiture shall be issued 
against Cablevision for each willful and/or repeated violation, except 
that the amount issued for any continuing violation shall not exceed 
the amount specified in section 503(b)(2)(A), 47 U.S.C. 503(b)(2)(A), 
for any single act or failure to act.
    30. It is further ordered that for the purposes of issuing a 
forfeiture, this document constitutes notice, as required by section 
503 of the Communications Act of 1934, as amended, 47 U.S.C. 503.
    31. It is further ordered that a copy of this order shall be sent 
by Certified Mail--Return Receipt Requested and regular first class 
mail to (i) Game Show Network, LLC, 2150 Colorado Avenue, Santa Monica, 
CA 90404, with a copy (including a copy via email) to Stephen A. 
Weiswasser, Esq., Covington and Burling LLP, 1201 Pennsylvania Avenue 
NW., Washington, DC 20004-2401 (sweiswasser@cov.com); and (ii) 
Cablevision Systems Corporation, 1111 Stewart Avenue, Bethpage, NY 
11714, with a copy (including a copy via email) to Howard J. Symons, 
Esq., Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 701 
Pennsylvania Avenue NW., Suite 900, Washington, DC 20004 
(HJSymons@mintz.com).
    32. It is further ordered that the Chief, Enforcement Bureau, is 
made a party to this proceeding without the need to file a written 
appearance, and she shall have the authority to determine the extent of 
her participation therein.
    33. It is further ordered that a copy of this order or a summary 
thereof shall be published in the Federal Register.
    34. This action is taken pursuant to authority delegated by 
Sec. Sec.  0.61 and 0.283 of the Commission's Rules, 47 CFR 0.61, 
0.283.

Federal Communications Commission.
William T. Lake,
Chief, Media Bureau.
[FR Doc. 2012-12146 Filed 5-17-12; 8:45 am]
BILLING CODE 6712-01-P