Judges Skeptical of WealthTV Position on Differences in FCC Treatment of It, Tennis Channel Case

Two of three judges asked skeptical questions of WealthTV’s lawyer, in the independent programmer’s attempt (CD March 13 p5) to get the 9th U.S. Circuit Court of Appeals to overturn an FCC denial of the indie’s program carriage complaint against four cable operators. At the oral argument Thursday in Pasadena, Calif., Judge Paul Watford asked almost all the questions of attorneys for WealthTV, the commission and the four operators. He also homed in on the FCC’s lawyer over whether there was a violation when the FCC administrative law judge, whose recommendation against the indie’s case was upheld by the full commission in 2011, didn’t consider some testimony as evidence.

That testimony was from then-Comcast Chief Operating Officer Steven Burke about the operator treating its own channels differently in carriage decisions from those not owned by the company. Bright House Networks, Cox Communications and Time Warner Cable were the other three defendants in WealthTV’s complaint, which alleged the four operators favored their own HD-affiliated network over the indie. Unlike in the U.S. Court of Appeals for the D.C. Circuit -- which last month heard oral argument on Comcast’s appeal of a program carriage order against it and in favor of the Tennis Channel (CD Feb 26 p1) -- the 9th Circuit judges interrupted lawyers much less.

Few other interested parties apart from the lawyers who participated in oral argument attended the hearing on WealthTV v. FCC, industry officials said. This story is based on a recounting of what transpired in oral argument from WealthTV CEO Robert Herring, who attended the oral argument with his son, channel President Charles, and our review of the audiotape the 9th Circuit argument posted online (http://1.usa.gov/XwaWoV). Other courtroom observers and representatives for the cable companies and commission had no comment.

The rare question any judge other than Watford asked, from Leslie Kobayashi, also expressed skepticism about WealthTV’s case. She asked David Schlesinger, representing the plaintiff, about its contention that the FCC shouldn’t have considered expert testimony from a consultant who said the genre that WealthTV and the operator-affiliated network that did get carriage on the four defendants, Mojo, wasn’t the same. “The difficulty I have with this lifestyle genre, and maybe you can help me understand this, is unlike sports, I think it is so broad,” Kobayashi said. “Lifestyle is just like saying human species. So isn’t the sub-genre analysis appropriate when you have such a broad genre?” Schlesinger said the “FCC has diverged in its approach on this issue” in the WealthTV case compared with the Tennis Channel, where the commission found that channel’s broad genre of sports was sufficient to show Comcast’s own networks which the operator carried more widely were similarly situated to Tennis. The Media Bureau order sending the Game Show Network’s program carriage complaint to the same ALJ “went so far as to suggest the Game Show Network was part of a broad genre classification with two networks, We TV and the Wedding Channel, that have a very heavily skewed female audience, and really on their face don’t seem to have any connection with the network,” Schlesinger said. The bureau said those three channels have a “broad” connection, he continued.

Watford disagreed with some of Schlesinger’s arguments about genre differences identified by a cable operator’s expert, Michael Egan, in the WealthTV ALJ proceeding. “That was hardly the heart of either the ALJ’s or the FCC’s analysis, though,” the judge said. “It was the difference in the target demographics and the difference in the type of programs that the networks carried, right?” he asked. “We quibble with the FCC’s analysis” because it didn’t “properly” get the difference between a network’s target demographic and the breadth of its potential audience. “There were serious problems” in Egan’s judgment of differences in sub-genres: “The FCC explicitly noted that Mr. Egan’s sub-genre analysis was neither accepted in the industry, nor one it could accept” in the Tennis Channel program carriage complaint where Egan worked for Comcast, Schlesinger said.

Watford saw “no inconsistency in the FCC’s ruling between your case and that case,” he said of WealthTV’s complaint and the Tennis Channel, saying there may have been a different “mode of analysis” between the cases. Schlesinger said the “same policies in standards” weren’t applied in a “consistent genre analysis.” Watford replied that “that just doesn’t register with me,” because Egan said his analysis in WealthTV’s case was different than his in the Tennis Channel. “If something looks like a duck, and quacks like a duck and walks like a duck, it is a duck,” Schlesinger said of the comparability. On WealthTV’s contention that the commission got it wrong on which party bears the burden of proof in its case, Watford said “if we conclude that the FCC was right” on other merits of the case “then it seems to me it doesn’t matter ... who had the initial burden."

Is the fact that Burke’s testimony wasn’t included in the ALJ ruling enough to reverse the commission on WealthTV, Watford asked Schlesinger. WealthTV’s attorney responded yes. But the judge said, “I'm with you that it seemed like it was an error to keep it out here,” speaking about Burke’s testimony. But “if we don’t find an APA [Administrative Procedure Act] violation, and don’t find an error on the other issues you've raised,” then that’s not enough for the 9th Circuit panel to remand the case to the FCC, Watford said. The exclusion of Burke’s testimony means “the record could be slightly opened to allow Burke’s admission to come in,” the lawyer said.

Watford and the FCC’s lawyer, Grey Pash, spent some time on the Burke testimony exclusion. “WealthTV has conceded that’s not a determinative factor,” Pash said. “It certainly does seem like error, though,” Watford responded. “Well, I don’t think it’s error, obviously,” Pash parried. He later said the problem with the testimony was it wasn’t authenticated under federal rules of evidence. “I recognize that this is a technicality, but the entire federal rules of evidence are often made up of technicality,” Pash said. “That’s why we have those rules."

The lawyer for the four operators said “there was no error” on Egan’s testimony on the comparability of WealthTV programming to what was on Mojo, but even if it’s excluded the case should stand. “There was ample other evidence in the record as to the differences in programming for the other networks,” said the lawyer, Jay Cohen. “I was surprised to find out that transcripts are not self-authenticating,” he said of Burke’s testimony. “All he said [was] that it could not be used in the context of cross-examination of another witness,” he said of the ALJ. “This is not the place to correct trial error.”