Cablevision’s Rare Appeal of Media Bureau Ruling to Get Hearing, as FCC May Uphold Order

The commission, meanwhile, is poised to soon act on new draft orders that would uphold the program access decisions, agency officials said. They said the office of FCC Chairman Julius Genachowski last week circulated twin orders upholding the bureau’s grants of part of the telcos’ program access complaints against Cablevision and Madison Square Garden. The September decisions required the plaintiffs to give AT&T and Verizon rights to carry the MSG and MSG+ networks in HD by Nov. 14. The telcos now only get the standard definition versions of the RSNs. The bureau last month stayed part of the orders, while leaving an Oct. 22 deadline to agree on carriage in place (CD Oct 12 p19).

The new draft orders awaiting a commission vote would end those stays, FCC officials said. They said that means Cablevision and MSG would soon need to start letting the two telcos carry MSG and MSG+ in HD. The draft items are seen by some at the FCC as straightforward, agency officials said. They could be voted on in time for Wednesday’s oral argument, the officials said. Even if not approved by then, the FCC’s lawyer could argue in court that the decisions are pending, the agency officials said. The pendency could be used by the FCC to bolster its case against the 2nd Circuit issuing a stay of the bureau decisions, because the full commission is poised to issue decisions backing the staff, an FCC official said. A commission spokesman declined to comment.

Two veteran communications lawyers couldn’t remember a recent instance where any U.S. circuit court of appeals agreed to hear oral argument on a request to stay an FCC staff decision. Judicial consideration of stays of even full commission actions are somewhat rare, they said. “There aren’t a lot of stays that reach court, period,” said Senior Vice President Andrew Schwartzman of the Media Access Project. It backed last year’s FCC order which allowed the commission to consider complaints that a channel affiliated with a cable operator and delivered without using satellites was withheld from a pay-TV company. The U.S. Court of Appeals for the D.C. Circuit this year remanded part of the 2010 program access order to the commission.

"It’s been very rare that the commission has had to defend a stay motion that the commission itself has not ordered,” in terms of not issuing the decision being challenged, said cable lawyer Dan Brenner of Hogan Lovells. “There appears to be very few cases where this has happened.” AT&T and Verizon opposed the Cablevision and MSG stay request. “Contrary to Cablevision’s assertion, under an FCC rule that the D.C. Circuit has upheld, Cablevision is not entitled to an automatic stay simply because it has asked the FCC to review the” orders, the telcos said. “Cablevision is not likely to succeed on its challenges to the Orders, which largely rehash legal arguments that the FCC and D.C. Circuit have already rejected, and that the Orders properly reject as well."

Cablevision and MSG relied on the All Writs Act in their Oct. 7 emergency request to the 2nd Circuit for stays. That’s somewhat unusual, said a cable industry lawyer not part of the case. The act is akin to habeas corpus for regulatory law, the attorney noted. There are few other cases that have been before the D.C. Circuit in which an FCC staff decision was appealed, the lawyer noted. “Orders of subordinate FCC units are not reviewable in court by way of a petition for review,” the cable operator and cable programmer said jointly. “This Court unquestionably will, however, have jurisdiction to review the FCC’s order on the pending administrative appeal (Cablevision and MSG are both headquartered in New York),” those two companies said. “And, it is well established that this Court can grant interim relief pursuant to the All Writs Act where Rule 18 stays are unavailable."

In a 1985 D.C. Circuit case, Reynolds Metals v. FERC, that court found a bureau order can be stayed under the act in rare instances, the FCC said. “Such extraordinary relief is not warranted here. Cablevision and MSG are unable to establish that they are likely to ultimately succeed on the merits of their challenges to the Bureau’s orders. Moreover, the crux of any stay request, particularly one seeking drastic relief under the All Writs Act, is irreparable injury.” Cablevision gave “cursory discussion” of such injury that would occur if AT&T and Verizon were to carry MSG and MSG+, the commission said in its opposition to the stay request. The docket for the current case is 11-4104. Oral argument is set for Wednesday at 10 a.m. in the Ceremonial Courtroom on the 9th Floor of the 2nd Circuit, at 500 Pearl St. in New York, an Oct. 19 order in the docket said.

"The record evidence clearly demonstrates there has been no competitive harm to the nation’s two largest phone companies as a result of not having two HD channels they already receive in SD,” a Cablevision spokeswoman said Friday. “We continue to believe that in a highly competitive marketplace that Verizon and AT&T should be required to compete based on the quality of their products and not by manipulating federal law.” MSG declined to comment. “The Bureau ignored the plain text of the applicable ‘program access’ statute, unlawfully placed the burden of persuasion on petitioners, and violated petitioners’ First Amendment rights by forcing them to share protected speech,” Cablevision and MSG said in their request for stay. “Absent relief from this Court, these errors will cause petitioners irreparable injury.”