Comcast Sues Maine To Stop Law Requiring Sale Of Individ. TV Channels
COMCAST VS À LA CARTE —
Comcast sues Maine to stop law requiring sale of individual TV channels
Industry suit says Maine law violates First Amendment and Communications Act.
JON BRODKIN - 9/10/2019, 9:54 AM
Comcast and several TV network owners have sued the state of Maine to stop a law that requires cable companies to offer à la carte access to TV channels. The complaint in US District Court in Maine was filed Friday by Comcast, Comcast subsidiary NBCUniversal, A&E Television Networks, C-Span, CBS Corp., Discovery, Disney, Fox Cable Network Services, New England Sports Network, and Viacom.
The companies claim the Maine law—titled "An Act To Expand Options for Consumers of Cable Television in Purchasing Individual Channels and Programs"—is preempted by the First Amendment and federal law. The Maine law is scheduled to take effect on September 19 and says that "a cable system operator shall offer subscribers the option of purchasing access to cable channels, or programs on cable channels, individually." The lawsuit seeks an injunction to prevent the law from being enforced.
Many cable TV customers want the ability to pay for channels individually instead of in large bundles, in hopes of getting only the channels they want and saving money in the process. But cable TV operators and the programmers that license their content to cable TV operators have resisted changes to the bundle system.
"I submitted this bill on behalf of Maine's hundreds of thousands of cable television subscribers," Representative Jeffrey Evangelos, an independent, said in testimony when the bill was being debated in March. "For far too long, consumers have been forced to purchase cable TV packages which include dozens of channels the consumer has no interest in watching."
Comcast cites First Amendment rights
But the current system involving service tiers and bundling "reflect[s] the exercise of First Amendment rights—both by the programmers who decide how to license their programming to cable operators, and by the cable operators who decide how to provide that programming to the public," the industry lawsuit said.
Besides the First Amendment, the lawsuit says that "an array of federal statutory provisions precludes Maine from dictating how cable programming is presented to consumers." The state law "is expressly preempted by several provisions of the Communications Act," including a section that "prohibits state and local authorities from regulating the 'provision or content of cable services, except as expressly provided in' Title VI of the Communications Act," the lawsuit said.
The Maine law is also preempted by Communication Act sections that prohibit local franchising authorities "from regulating 'the services, facilities, and equipment provided by a cable operator except to the extent consistent with [Title VI],' or from 'establish[ing] requirements for video programming,' except in very limited respects not applicable here," the industry argued.
Moreover, Comcast and the programming companies argue that forced à la carte pricing would end up costing consumers more.
"Programmers often negotiate license fees with cable operators based on tiered carriage, and eliminating such carriage would force programmers to charge higher license fees to cable operators, which ultimately would be passed on to subscribers," the complaint said.
“Thin legislative record”
Evangelos argued in his legislative testimony that Maine can take action because of a Federal Communications Commission statement that "There is no law that requires (or prohibits) cable companies to offer channels or programs on an à la carte basis."
"Therefore, since there is no federal regulation prohibiting à la carte pricing, it is within a state's authority to add this option for Maine's local franchising authorities," he said.
But the industry complained that the "thin legislative record" generated by lawmakers didn't meet the state's legal burden. The industry also complained that the Maine law applies only to cable companies and not to competitors such as satellite TV operators and online streaming providers.
We contacted Maine Governor Janet Mills' office about the lawsuit and will update this story if we get a response.
Defendants named in the lawsuit are Mills, Maine Attorney General Aaron Frey, and the municipalities of Bath, Berwick, Bowdoin, Bowdoinham, Brunswick, Durham, Eliot, Freeport, Harpswell, Kittery, Phippsburg, South Berwick, Topsham, West Bath, and Woolwich. The lawsuit was filed against municipalities because they would have the authority to enforce the state law. That list covers Maine municipalities where Comcast has franchise agreements.
The cable company Charter also opposed the Maine law but isn't involved in the lawsuit.
In a statement provided to Ars, Comcast and the TV networks said that "Maine's à la carte mandate is prohibited under federal law and is unconstitutional... the law is not only unnecessary, but also likely to suppress competition and result in higher consumer prices and less program diversity."