## Facts

- Comcast, a multichannel video programming distributor, carried its affiliated sports networks (Golf Channel and Versus/NBC Sports Network) on widely distributed tiers.
- Tennis Channel, an unaffiliated sports programmer, was carried by Comcast on a less widely distributed, more expensive sports tier.
- Tennis Channel filed a program carriage complaint alleging Comcast’s tier placement favored affiliated networks and unlawfully discriminated against Tennis Channel.
- Tennis Channel proposed a revised carriage arrangement to obtain broader distribution; Comcast rejected it, asserting a profit-based business rationale described as a “straight up financial analysis.”
- An FCC Administrative Law Judge found unlawful discrimination and ordered Comcast to provide Tennis Channel carriage comparable to Golf Channel and Versus.
- The FCC affirmed and ordered Comcast to move Tennis Channel to a more widely distributed tier.
- Comcast petitioned for judicial review of the FCC’s order.

## Issues

1. Whether substantial evidence supported the FCC’s finding that Comcast discriminated against Tennis Channel “on the basis of” nonaffiliation in violation of 47 U.S.C. § 536 and the FCC’s program carriage rules.
2. Whether the FCC adequately rebutted Comcast’s asserted neutral business justification for its tiering decision and showed the conduct unreasonably restrained Tennis Channel’s ability to compete.

## Decision

- The court granted Comcast’s petition for review and set aside the FCC’s order.
- Even assuming the FCC’s interpretation of § 536 and its rules, the court held the agency failed to identify adequate evidence of unlawful discrimination.
- The court concluded the record did not refute Comcast’s explanation that its decision was driven by a financial analysis rather than affiliation-based favoritism.

## Legal Principles

- Under § 536 and implementing rules, differential treatment between affiliated and unaffiliated programmers is not enough; the agency must show the challenged conduct was “on the basis of” affiliation/nonaffiliation and unreasonably restrained the unaffiliated programmer’s ability to compete.
- On review of an agency adjudication, the court will vacate an order not supported by substantial, record-based evidence.
- Where a regulated entity offers a facially neutral business justification, the agency must point to record evidence that reasonably undermines that justification to sustain a finding of unlawful affiliation-based discrimination.

## Conclusion

The D.C. Circuit vacated the FCC’s program-carriage remedy against Comcast because the agency failed, on the administrative record, to produce substantial evidence that Comcast’s tier placement decision was motivated by affiliation rather than a non-discriminatory business rationale.


Comcast Cable Commc'ns, LLC v. FCC, 717 F.3d 982 (D.C. Cir. 2013)