GSN, Cablevision Repeat Tiering Discrimination Arguments as Hearing Nears

After the main part of a summer FCC administrative law judge hearing ended over whether a cable operator discriminated against an independent programmer by moving the indie to a less-popular channel tier, both sides traded filings on who is at fault. That came Friday in docket 12-122. That Cablevision never considered moving an affiliated network, rather than Game Show Network, from basic cable to a sports tier, and dangled the option of its return to basic only if GSN affiliate DirecTV gave good carriage to Cablevision-affiliated Wedding Central, makes it indisputable that GSN was discriminated against, said the indie. The operator countered that GSN's assertions lack any proof: "GSN has not introduced a single piece of direct evidence that Cablevision discriminated ... to favor its affiliated programming networks, WE tv and Wedding Central."

The dueling filings -- more than 240 pages combined -- repeated their arguments in GSN's complaint against Cablevision for the 2011 retiering move. The proposed findings of fact and proposed conclusions of law filings follow nearly two weeks of hearings in July before Chief FCC ALJ Richard Sippel (see 1507070053). Replies to the filings are due Sept. 30, with the Enforcement Bureau commenting Oct. 15. Closing oral argument is Oct. 29. Sippel is expected to rule later, said a cable attorney.

That the retiering move was never open to negotiations, and that Cablevision never considered retiering its own Wedding Central and WE tv -- competition for GSN -- are proof the company treated its own affiliated networks differently, GSN said. Being affiliated with Cablevision brought "benefits ... not provided to non-affiliated networks," such as televised promotion and on Cablevision's website and in customer bills, GSN said. When Cablevision's John Bickham, president-cable and communications, asked for an analysis of the effect of dropping GSN from its systems, he didn't ask for a similar such analysis of any other network, GSN said.

Much of the dispute involves whether GSN and Cablevision's WE tv and now-gone Wedding Central are direct competitors. GSN has specifically courted female viewers, and made such executive moves as appointing Kelly Goode, who had worked at Lifetime, as head of programming, and Dale Hopkins, who had helped launch the Style and E! Entertainment Television networks, as head of marketing, the network said. Meanwhile, GSN internally would frequently point to WE tv as being part of its direct competitors because it also catered to female viewers in programming, marketing and ad sales, GSN said.

Cablevision said GSN isn't similarly situated to Wedding Central or WE tv, with very different programming, and its target viewer -- contrary to what GSN says -- was "a broad audience of game-playing enthusiasts, both men and women. The fact that GSN and WE tv have certain overlapping advertisers does not change the calculus." Since the retiering, GSN has maintained its ratings both nationally and in the New York market, and increased its ad revenue, Cablevision said.

The sides disagree strongly about DirecTV's place in the dispute. "Distribution on DirecTV had been a key plank of Wedding Central’s business plan since the network launched," GSN said. Aside from the DirecTV quid pro quo, "Cablevision offered GSN no other means of retaining broad carriage," GSN said. It was GSN, not it, that "first hatched the idea of tying carriage of Wedding Central on DirecTV to GSN’s carriage on Cablevision," the operator said. It said it was Derek Chang, then DirecTV executive vice president-content strategy and development, and a GSN management committee member, "rather than any GSN executive," who contacted the cable company after the retiering move "to see what could be done to reverse Cablevision’s carriage decision. There is no evidence in the record suggesting, much less proving, that Cablevision retiered GSN in the hope of engaging DirecTV in a discussion of trading broader GSN carriage for carriage of Wedding Central."

GSN's complaint that the retiering is an "ongoing violation" falls apart because it didn't plead any continuing violation when it made its complaint, Cablevision said. Even if there was proof GSN and WE tv were similarly situated, Cablevision said it made the retiering decision "for legitimate business reasons" -- a need to save money in the face of higher broadcast network retransmission fees, network bundling of programming, higher sports rights fees and increased competition. "GSN was watched by relatively few Cablevision subscribers" and those viewers "were unlikely to leave Cablevision in substantial numbers if the network was dropped," said the operator.