FCC Votes To Close Loophole That Kept Some Sports Nets Off Satellite; Appeal Expected

Philadelphia Flyers

Sports fans with satellite subscriptions may finally get access to some regional sports networks that cable programmers — particularly those owned by cable operators — have been able to keep exclusive through the so-called “terrestrial loophole.” The Federal Communications Commission voted 4-1 today that multichannel video providers delivering programming by cable — primarily Comcast (NSDQ: CMCSA), Cox and Cablevision (NYSE: CVC) — will have to share with competitors like DirecTV (NYSE: DTV), Dish, Verizon FiOS and AT&T (NYSE: T) U-verse.

The operator getting the most attention is Comcast, which essentially has a lock on major sports programming through terrestrially delivered Comcast SportsNet Philadelphia, drawing scrutiny from U.S. Sen. Arlen Specter and others especially when crucial games are blocked. Verizon and RCN already have deals to carry Comcast is expected to appeal but the company declines comment for now pending review of the order. It sounds like programmers won’t be able to fulfill the FCC’s ruling with standard definition only; HD has to be included. Cablevision has been holding back its MSG Network in HD, drawing complaints from Verizon.

The vote takes sports programming access off the table as a condition for approval of the merger between Comcast and NBC Universal (NYSE: GE). Bernstein Research analyst Craig Moffett told clients: “We, like many others, had initially expected closure of the terrestrial loophole to be an important condition of approval for Comcast’s acquisition of NBC Universal. By accelerating action to close the loophole – even before Comcast has filed for approval for the NBCU deal with the FCC

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