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Media Bureau Announces Decision on Review of Arbitration Award

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Released: November 13, 2012

PUBLIC NOTICE

Federal Communications Commission

News Media Information 202 / 418-0500

445 12th St., S.W.

Internet: http://www.fcc.gov

Washington, D.C. 20554

TTY: 1-888-835-5322

DA 12-1829

Released: November 13, 2012

MEDIA BUREAU ACTION

MEDIA BUREAU ANNOUNCES DECISION REQUIRING NBCUNIVERSAL

MEDIA, LLC TO PROVIDE FIRST-YEAR FILMS TO STARTUP ONLINE VIDEO

DISTRIBUTOR PROJECT CONCORD, INC.

Also concludes that NBCU need not provide programming

that would result in breach of certain NBCU licensing agreements.

MB Docket No. 10-56

On July 16, 2012, NBCUniversal Media, LLC (“NBCU”) filed a Petition for De Novo Review of
an arbitration award issued under the Benchmark Condition of the Comcast/NBCU Order.1 On the same
day, Project Concord, Inc. (“PCI”) filed a Partial Appeal of the arbitrator’s decision.2 As summarized
below, the Media Bureau today adopted a decision granting NBCU’s Petition in part and denying it in
part and denying PCI’s Partial Appeal.
(1)
The Media Bureau rejects NBCU’s argument that Video Programming as defined in the
Comcast/NBCU Order conditions must be read as excluding all films for which less than one year has
elapsed since their theatrical release (“first-year films”) and concludes that these first-year films are
included within the scope of the Benchmark Condition.
(2)
In considering NBCU’s asserted defense that it is prohibited under its licensing
agreements with other third parties from providing PCI with the requested programming, the Media
Bureau clarifies that the correct standard to be applied in evaluating a contractual defense to a claim under
the Benchmark Condition is whether NBCU has demonstrated by a preponderance of the evidence, based
on the language of the relevant licensing agreement and evidence regarding the interpretation of that
language, that NBCU’s provision of programming to the Online Video Distributor (“OVD”) would
constitute a breach of a contract to which Comcast Corporation (“Comcast”) or NBCU is a party,
provided that the agreement allegedly breached is “consistent with reasonable, common industry


1 See Applications of Comcast Corporation, General Electric Company and NBC Universal, Inc. for Consent to
Assign Licenses and Transfer Control of Licensees, Memorandum Opinion and Order, 26 FCC Rcd 4238, 4360,
App. A., § IV.A.2.b (2011) (“Comcast/NBCU Order”); see also NBCUniversal Media, LLC, Petition for De Novo
Review, MB Docket No. 10-56 (July 16, 2012) (“Petition”). NBCU and PCI are collectively the “Parties.”
2 See Project Concord, Inc., Partial Appeal, MB Docket No. 10-56 (July 16, 2012) (“Partial Appeal”).

practice.”3 Applying this standard, the Media Bureau concludes that NBCU has demonstrated by a
preponderance of the evidence that licensing certain films and TV programs to PCI would constitute a
breach of various NBCU licensing agreements that are “consistent with reasonable, common industry
practice.”
(3)
The Media Bureau concludes that NBCU did not engage in “unreasonable conduct”
during the course of the arbitration proceeding that would warrant grant of PCI’s request to shift its
attorneys’ fees and other costs and expenses to NBCU.
The de novo review of arbitration awards involving requests for online video programming under
the Benchmark Condition necessarily involves the analysis of proprietary commercial and financial
information, including the price, terms, and conditions for carriage of the programming at issue.4
Moreover, in this particular case, the Parties have substantially redacted the public versions of their
pleadings. Today, the Media Bureau has separately released an unredacted version of its decision to
outside counsel to the Parties. The Media Bureau hereby affords the Parties’ outside counsel the
opportunity to jointly submit suggested redactions of proprietary commercial and financial information.
The Parties’ outside counsel must jointly submit their suggested redactions to the Media Bureau no later
than November 20, 2012. The Media Bureau cautions the Parties’ outside counsel to propose redactions
of only that material which they believe in good faith falls within an exemption to disclosure under
Commission rules5 and to refrain from proposing redactions of information that has been previously
disclosed to the public. The Media Bureau will release a public version of the decision after considering
the redactions suggested by the Parties’ outside counsel.
For further information, contact David Konczal, David.Konczal@fcc.gov; or Kathy Berthot,
Kathy.Berthot@fcc.gov; of the Media Bureau, Policy Division, (202) 418-2120. Press inquiries should
be directed to Janice Wise, (202) 418-8165.
-FCC-


3 Comcast/NBCU Order, 26 FCC Rcd at 4361, 4368, App. A, §§ IV.B.1,VII.C.3.
4 See id. at 4360, App. A, § IV.A.2.b(ii). In adopting the Comcast/NBCU Order arbitration conditions, the
Commission specifically contemplated that these arbitrations would involve commercially sensitive material and
that arbitrators would have to produce both a confidential and a redacted version of their decisions. See id. at 4370,
App. A, § VIII.7.
5 See 47 C.F.R. § 0.457; see also 5 U.S.C. 552(b).
2

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