Comcast Defeats FCC Order on Distributing Tennis Channel

Comcast Corp. (CMCSA)’s decision to carry the Tennis Channel as premium programming was a business judgment that didn’t discriminate against programming owned by others, a U.S. appeals court ruled, overturning a regulator’s order to include the channel in lower-cost packages.

A three-judge panel of the U.S. Court of Appeals in Washington today unanimously rejected a Federal Communications Commission mandate to make the Tennis Channel more widely available on its cable systems, a demand the largest U.S. cable company said would force it to pay hundreds of millions of dollars more for the programming.

“Without showing any benefit for Comcast from incurring the additional fees for assigning Tennis a more advantageous tier, the commission has not provided evidence that Comcast discriminated against Tennis on the basis of affiliation,” Circuit Judge Stephen Williams wrote.

Comcast sued the FCC after the regulator last year required it to distribute the Tennis Channel to the same number of subscribers who receive two sports networks owned by the cable company, the Golf Channel and the NBC Sports Network. The FCC also assessed a $375,000 penalty against Philadelphia-based Comcast.

Investors in the closely held Tennis Channel include Apollo Partners, Bain Capital Ventures, Battery Ventures, CCMP Capital Advisors, Columbia Capital, DND Capital Partners LLC and ex-players Andre Agassi and Pete Sampras, according to the channel’s website.

Comcast Comment

“Tennis Channel received exactly the carriage it bargained for and agreed to,” Sena Fitzmaurice, a spokeswoman for Comcast, said in an e-mailed statement. She said the company was pleased with the court’s decision.

Neil Grace, an FCC spokesman, declined to comment on the decision.

The Tennis Channel, which intervened in the case, said it would seek additional review of the appeals court’s decision, according to Eric Abner, a spokesman for the channel.

“We believe that it is the obligation of the FCC to act in the public interest to ensure a diverse marketplace of voices, as mandated by Congress when it introduced the Cable Act,” Abner said in an e-mailed statement.

Bloomberg LP, the parent company of Bloomberg News, filed a brief in the case backing the FCC and the Tennis Channel.

The case is Comcast Cable Communications LLC v. Federal Communications Commission, 12-01337, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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