UPDATE 3-Verizon, AT&T get sports win with US FCC order

Thu Jan 21, 2010 3:19am IST

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* Order to help AT&T, Verizon access NY sports games

* Could force Cablevision to allow access to MSG games

* FCC chair says order is a step toward competition (Adds Cablevision comments, details on complaint process)

By John Poirier

WASHINGTON, Jan 20 (Reuters) - U.S. regulators handed phone and satellite companies a victory in the pay television market by preventing cable operators from blocking access to some sports programming.

Verizon Communications Inc (VZ.N), AT&T Inc (T.N) and satellite providers DirecTV (DTV.O) and DISH Network Corp (DISH.O) have complained they have been denied access to sports programming in some lucrative markets by incumbent cable companies.

The U.S. Federal Communications Commission voted 4-1 on Wednesday to establish a formal process to apply for sports programming and for cable operators to appeal. Republican commissioner Robert McDowell voted against the rule.

"Today's action represents a major step toward realizing the promise of a competitive marketplace for video services," FCC Chairman Julius Genachowski said at an open FCC meeting.

"The bottom line is that viewers should not be unfairly forced to choose between the sports teams they love and the provider they prefer," he said.

The issue of competitors' ability to access programming is likely to be a key issue when the FCC reviews the proposed joint venture between Comcast Corp (CMCSA.O) and General Electric Co's (GE.N) NBC Universal.

Verizon and AT&T want to carry games by the New York Knicks basketball team and the New York Rangers, New York Islanders and New Jersey Devils ice hockey teams carried by the Madison Square Garden (MSG) network.

In August, AT&T filed a complaint with the FCC alleging anti-competitive practices against Cablevision Systems Corp (CVC.N), which owns MSG, the Knicks and the Rangers.

Bethpage, New York-based Cablevision said it is pleased that the FCC added a complaint process that allows incumbent cable operators to present their case and appeal a decision.

"Verizon and AT&T do not need a regulatory bailout in order to compete," the company said in a statement.

AT&T's senior vice president for federal regulatory affairs, Bob Quinn, said in a statement that the FCC action means "consumers will have more choices."

AT&T provides its customers in Connecticut with standard MSG programming, but was not able to access high-definition programming. AT&T also complained that Cox Communications [COXC.UL] was blocking access to carry San Diego Padres baseball games.

Public interest groups, including Public Knowledge, lauded the FCC move but urged the agency to adopt new rules to give video providers such as Netflix Inc (NFLX.O) and Amazon.com Inc (AMZN.O) access to cable programming.

"We hope the commission will take a similar view to allowing and encouraging competition in the developing world of Internet-delivered programming," Public Knowledge President Gigi Sohn said in a statement.

Under the new FCC process, competitors seeking to carry regional sports programs shown by an incumbent cable provider must first go through a complaint process and show how they are being harmed before the FCC issues a decision.

Verizon and AT&T will not have to refile their complaints but can supplement them.

After a complaint is filed, the cable company has 45 days to respond and the complainant has 15 days to reply before the full FCC or its Media Bureau issues a decision.

If a decision rules in favor of a complainant, the cable company can appeal a bureau decision to the commission and a commission decision to a federal court. (Reporting by John Poirier; Editing by Matthew Lewis and Tim Dobbyn)

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