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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) DIRECTV, Inc., ) CSR 5112-P Complainant, ) ) v. ) ) COMCAST Corporation, ) COMCAST-SPECTACOR, L.P., ) COMCAST SPORTSNET, ) Defendants. ) MEMORANDUM OPINION AND ORDER Adopted: October 26, 1998 Released: October 27, 1998 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. DIRECTV has filed a program access complaint ("Complaint") against Comcast Corporation ("Comcast"), Comcast-Spectacor, L.P., and Comcast SportsNet ("SportsNet") (collectively referred to as "Defendants") alleging that Defendants are in violation of Sections 628(b) and (c) of the Communications Act of 1934, as amended ("Communications Act"), and Sections 76.1002(a) and (b) of the Commission's rules, by evading application of the program access rules, unreasonably refusing to sell programming, and exercising undue influence over the distribution of satellite cable programming. II. BACKGROUND 2. Congress enacted the Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act") to promote competition, with the view that regulation would be transitional until the video programming distribution market becomes competitive. In enacting the program access provisions, codified in Section 628 of the Communications Act, Congress sought to minimize the incentive and ability of vertically integrated programming suppliers to favor affiliated cable operators over nonaffiliated cable operators or other multichannel video programming distributors ("MVPDs") in the sale of satellite cable and satellite broadcast programming. 3. Section 628(b) of the Communications Act states that: [i]t shall be unlawful for a cable operator, a satellite cable programming vendor in which a cable operator has an attributable interest, or a satellite broadcast programming vendor to engage in unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which is to hinder significantly or to prevent any multichannel video programming distributor from providing satellite cable programming or satellite broadcast programming to subscribers or consumers. In Section 628(c), Congress instructed the Commission to promulgate regulations that: (A) establish effective safeguards to prevent a cable operator which has an attributable interest in a satellite cable programming vendor or a satellite broadcast programming vendor from unduly or improperly influencing the decision of such vendor to sell, or the prices, terms, and conditions of sale of, satellite cable programming or satellite broadcast programming to any unaffiliated multichannel video programming distributor; [and] (B) prohibit discrimination by a satellite cable programming vendor in which a cable operator has an attributable interest or by a satellite broadcast programming vendor in the prices, terms, and conditions of sale or delivery of satellite cable programming or satellite broadcast programming among or between cable systems, cable operators, or other MVPDs or their agents or buying groups. . . . 4. In Implementation of Sections 12 and 19 of the Cable Television Consumer Protection and Competition Act of 1992: Development of Competition and Diversity in Video Programming Distribution and Carriage, MM Docket No. 92-265, First Report and Order ("Program Access Report and Order"), the Commission concluded that non-price discrimination is included within the prohibition against discrimination set forth in Section 628(c)(2)(B). While the Commission did not attempt to identify all types of non-price discrimination that could occur, the Commission stated that "one form of non-price discrimination could occur through a vendor's 'unreasonable refusal to sell', or refusing to initiate discussions with a particular distributor when the vendor has sold its programming to that distributor's competitor." The Commission cautioned, however that "'unreasonable' refusals to sell" should be distinguished from "certain legitimate reasons that could prevent a contract between a vendor and a particular distributor." Such legitimate reasons would include: (i) the possibility of [the] parties reaching an impasse on particular terms, (ii) the distributor's history of defaulting on other programming contracts, or (iii) the vendor's preference not to sell a program package in a particular area for reasons unrelated to an existing exclusive arrangement or a specific distributor. 5. "Satellite cable programming" is "video programming which is transmitted via satellite and which is primarily intended for the direct receipt by cable operators for their retransmission to cable subscribers." "Satellite broadcast programming" is broadcast programming when such programming is retransmitted by satellite and the entity retransmitting such programming is not the broadcaster or an entity performing such retransmission on behalf of and with the specific consent of the broadcaster. III. THE FACTS 6. Complainant, DIRECTV, is a direct broadcast satellite ("DBS") provider that offers multichannel video programming distributor ("MVPD") service to approximately 2.8 million subscribers across the continental United States and Alaska. DIRECTV holds a Federal Communications Commission ("FCC" or "Commission") license to use three high-powered DBS satellites to offer approximately 175 channels of digitally-delivered entertainment, educational, and informational programming directly to homes and businesses equipped with a satellite dish antenna. In particular, DIRECTV offers various regional and national sports programming through arrangements with regional and national program suppliers and professional sports leagues. As an MVPD, DIRECTV competes directly with cable operators for subscribers. 7. Defendant Comcast is a multiple system cable operator ("MSO") based in Philadelphia and owns and operates, among other businesses, several cable systems and cable programming services. With over 4 million subscribers, Comcast is the nation's fourth largest cable operator. In July 1996, Comcast acquired a 66% interest in the Philadelphia Flyers L.P., to form a new partnership named Comcast-Spectacor, L.P. Comcast-Spectacor owns the following assets: 1) the Philadelphia Flyers National Hockey League ("NHL") team; 2) the Philadelphia 76ers National Basketball Association ("NBA") team; and 3) the CoreStates Spectrum and Corestates Center sports arenas. Also in 1996, Comcast-Spectacor entered into a joint venture agreement with the Philadelphia Phillies Major League Baseball ("MLB") team to create SportsNet. Commencing October 1, 1997, SportsNet provides 24-hour regional sports programming to cable subscribers in the Greater Philadelphia, Pennsylvania market. As a basic cable network, SportsNet appears on the basic service tier ("BST") at no additional charge to Comcast's cable subscribers. 8. The facts underlying DIRECTV's complaint are undisputed. Beginning in 1995, DIRECTV offered SportsChannel Philadelphia ("SportsChannel") programming to its subscribers nationwide. During the 1996-1997 season, DIRECTV subscribers had access to a total of 67 games carried on SportsChannel. SportsChannel and PRISM were commonly owned cable networks that served the Philadelphia market. SportsChannel was a satellite delivered basic tier network that offered numerous Philadelphia professional major league sport contests, including Philadelphia Flyers hockey games, Philadelphia 76ers basketball games, and Philadelphia Phillies baseball games. PRISM is a network that produced and distributed movies and other entertainment programming, in addition to Philadelphia professional major league sport contests. Unlike SportsChannel, PRISM was delivered through terrestrial technology, and its programming was available only as a premium priced subscription service. Both SportsChannel and PRISM terminated operations on September 30, 1997. Because SportsChannel distributed its programming through satellite technology, it was considered "satellite cable programming" subject to the program access rules. DIRECTV never carried PRISM programming. 9. By August 1997, Comcast and its partners, Comcast-Spectacor and SportsNet, acquired all the local telecasting rights previously held by the owner of both SportsChannel and PRISM. Thereafter, SportsChannel and PRISM announced they would cease to operate as of September 30, 1997. On October 1, 1997, SportsNet debuted as a new channel on Comcast's, and other cable operators', basic service tier in the Philadelphia market area. Defendants distribute SportsNet only through terrestrial microwave and fiber technology. In addition to the professional sporting events previously offered through SportsChannel and PRISM, SportsNet's programming includes various professional and collegiate sporting events that were not carried on either channel. SportsNet offers locally produced programming, such as sports related talk- shows and sports news shows. These shows are all original and have never appeared before on any programming service, including SportsChannel and PRISM. In addition, SportsNet carries two hours of FoxSports "backdrop" feed, consisting of daily news and minor sporting events. 10. Defendants have indicated that they license SportsNet programming to a wide variety of MVPDs in the Greater Philadelphia market, including local cable operators, wireless cable systems, also known as multichannel multipoint distribution systems ("MMDS"), satellite master antenna television ("SMATV") providers, and potential open video systems ("OVS"). From July 1997 to September 1997, DIRECTV made several attempts to negotiate with Defendants the carriage rights of SportsNet's programming. However, DIRECTV's efforts were unsuccessful, because Defendants indicated that SportsNet's programming would not be available to any national DBS provider. In a letter dated September 8, 1997, the President of SportsNet cited "legitimate business reasons" for the company's categorical refusal to deal with national DBS providers. After providing Defendants with the requisite ten days notice of its intent to file a program access complaint, DIRECTV filed the instant action on September 23, 1997, alleging that Defendants' refusal to sell SportsNet programming to DIRECTV violates the program access provisions of the Communications Act. IV. THE PLEADINGS 11. DIRECTV alleges that Defendants' actions have both the purpose and effect of preventing the distribution of satellite cable programming to DIRECTV subscribers in violation of Section 628(b). DIRECTV argues that Defendants chose to distribute SportsNet's programming through terrestrial means in order to evade application of the program access rules, which Defendants presume do not cover terrestrially distributed programming. DIRECTV further alleges that Defendants rely on SportsNet's manner of distribution as the basis for their refusal to license SportsNet's programming to any DBS providers. DIRECTV characterizes Defendants' outright refusal to sell as an "unfair practice" as contemplated in Section 628(b). DIRECTV also disputes the economic and cost justifications Defendants advanced to support their decision to distribute SportsNet terrestrially instead of by satellite. In this regard, DIRECTV claims it offered to share in SportsNet's satellite distribution costs. 12. DIRECTV further states that Defendants' actions violate Section 628(b), irrespective of their reasons for adopting terrestrial distribution for SportsNet. DIRECTV focuses on the language of Section 628(b) which is written in the disjunctive -- "purpose or effect" of which is to hinder significantly or to prevent the distribution of satellite cable programming to subscribers or consumers. DIRECTV contends that Defendants caused the demise of SportsChannel, which was clearly satellite cable programming. On September 30, 1997, when SportsChannel ceased operations, its Philadelphia regional sport programming was no longer available to DIRECTV's subscribers. Therefore, DIRECTV alleges that Defendants' actions violate Section 628(b), for they effectively precluded DIRECTV's offering of certain satellite cable programming to its subscribers. 13. To further support its Section 628(b) claim against Defendants, DIRECTV points to the legislative intent behind the program access provisions of the 1992 Cable Act, arguing that Congress enacted the program access rules to address the horizontal and vertical concentration within the cable and satellite programming field that inhibit development of MVPD competition. Accordingly, DIRECTV states that Section 628(b) provides the Commission with broad jurisdiction to advance the objectives of the program access rules. DIRECTV argues that Section 628(b) covers vertically integrated cable operators' attempts to evade program access obligations by switching their programming distribution from satellite to terrestrial means. In addition, DIRECTV cites to several of the Commission's Annual Assessment of Video Competition Reports, wherein the Commission discusses its authority to address the cable industry's use of terrestrial distribution in order to evade program access rules. 14. DIRECTV also alleges that Comcast and Comcast Spectacor have unduly or improperly influenced the satellite cable programming vendor, SportsNet, in violation of Section 628(c)(2)(A) and improperly discriminated against DBS providers in violation of Section 628(c)(2)(B), because when they refused to license SportsNet to DBS providers, they refused to license "satellite cable programming." DIRECTV asserts that under the rules of statutory construction the term "satellite cable programming" could be construed to encompass SportsNet, because it contains programming that was once satellite delivered. In making this assertion, DIRECTV contends that courts have looked at Congressional intent and provided deference to the Commission's expert judgment and interpretation even when the text of the Communications Act is superficially clear. Therefore, DIRECTV explains that although Section 628 references only satellite cable programming, that language should be read in light of the overall context, as well as the legislative history and underlying policy objectives of the 1992 Cable Act. Under this rationale, DIRECTV advocates a broad reading of the statute and asserts that SportsNet is satellite cable programming as contemplated by Section 628. DIRECTV further points to Defendants' admission that 67 games that were formerly part of SportsChannel's programming are now part of SportsNet's programming. Accordingly, DIRECTV states that the Commission can and should interpret satellite cable programming to encompass, at the very least, the 67 games previously available on SportsChannel. 15. In addition, DIRECTV claims that there is Commission precedent to adopt an expansive reading of the term "satellite cable programming". In particular, DIRECTV cites to the Commission's application of the program access rules to OVS providers, notwithstanding the statute's lack of reference to OVS. DIRECTV states that the Commission's application was proper for it effectuated the intent of Congress in enacting the OVS and program access provisions--mainly, to provide access to programming essential to competition in the MVPD marketplace. DIRECTV argues the Commission should read "satellite cable programming" to include SportsNet, since offering that type of sports programming is essential for DBS providers to attract and retain subscribers. To reach a contrary result, DIRECTV believes would undercut the effectiveness of the program access provisions and impede the development of competition in the MVPD marketplace. As a matter of policy, DIRECTV states that a ruling in favor of Defendants would provide vertically integrated cable operators with a license to evade the program access provisions and prevent competing MVPDs from obtaining vital programming. 16. In its Answer, Defendants assert that their conduct does not violate Sections 628(b) or 628(c) and is not anti-competitive to the MVPD market. Defendants argue that the Commission is granted only limited authority to adjudicate disputes regarding access to satellite cable and satellite broadcast programming. In determining the status of SportsNet, Defendants assert that it is irrelevant that the now defunct SportsChannel was satellite cable programming. Since its inception, SportsNet has been distributed solely through terrestrial microwave and fiber technologies. Thus, from a plain reading of the Section 628(b), Defendants argue that SportsNet is not satellite cable programming and falls outside the scope of the program access laws. Accordingly, Comcast contends that the Commission has no jurisdiction to hear the instant dispute involving SportsNet. 17. Assuming the Commission has jurisdiction to hear this case, Defendants challenge DIRECTV's claim that SportsNet is terrestrially delivered in order to evade the program access rules. According to Defendants, SportsNet constitutes a new and original programming service that cannot be considered, in any logical sense, a continuation of SportsChannel. In support of its claim, Defendants detail how SportsNet is different in ownership, management, name, and content from SportsChannel. Defendants allege that SportsNet will telecast programming never before seen on SportsChannel or PRISM, including various collegiate games, sports news shows, and a host of original and locally-produced shows. For example, Defendants assert that SportsChannel and SportsNet differ in the amount and extent of coverage. For the 1996-1997 sports season, SportsChannel carried a total of 67 games, consisting of Philadelphia's professional sports teams. In contrast, for the 1997-98 sports season, Defendants allege that SportsNet will telecast over 178 games, including professional and collegiate teams. Defendants indicate that SportsNet will appear on Comcast's BST, at no additional cost to Comcast's cable subscribers. Considering these significant differences, Defendants state that SportsNet is neither a replacement to, nor the equivalent of, SportsChannel. Therefore, Defendants argue that DIRECTV's evasion claim must fail, because SportsChannel was not "moved" to terrestrial distribution in order to circumvent the program access rules. 18. Defendants further claim that the creation of SportsNet does not have the purpose or effect of hindering development of MVPD competition in violation of Section 628(b). Defendants explain that their rationale for adopting terrestrial distribution for SportsNet was grounded in sound economics and cost analysis. First and foremost, Defendants state that terrestrial distribution is significantly less expensive than satellite distribution. In this regard, Defendants point out that they had access to the pre-existing terrestrial infrastructure of PRISM to deliver SportsNet. Further, SportsNet was being offered to the same base of terrestrial operators that formerly distributed PRISM. As a microwave and fiber-optic cable system was already in place, Defendants argue that it was both logistically simple and economical to adopt terrestrial distribution for SportsNet. Second, Defendants claim that satellite distribution substantially increases the costs of policing against signal theft. Third, Defendants believe there is no reason to incur the higher costs associated with satellite distribution because SportsNet is a regional service of general interest only in the Greater Philadelphia market. 19. Defendants raise several points why the adoption of terrestrial distribution for SportsNet does not have the effect of hindering or preventing MVPDs from access to satellite cable programming in violation of Section 628(b). Although acknowledging that DIRECTV and other DBS providers will not have access to SportsNet, Defendants stress that other competing MVPDs in the Greater Philadelphia market will have access to SportsNet. These competing MVPDs include MMDS, OVS providers, SMATV, as well as all local cable systems. Furthermore, Defendants note that their actions do not absolutely prevent DIRECTV, or any DBS provider, from offering Philadelphia sports programming to customers located outside the Philadelphia market. Defendants explain that such "out-of-market" telecasting rights for professional sports are held by the respective professional leagues, not the owner of the local telecasting rights. Therefore, Comcast argues that only DIRECTV's subscribers in the Philadelphia market could be potentially affected by the instant complaint. 20. Defendants also dispute DIRECTV's allegation that its refusal to sell or negotiate the distribution of SportsNet to DBS providers violates Section 628(c). Defendants again point to the plain language of the statute, wherein the program access rules expressly apply to satellite delivered programming. Because SportsNet is terrestrially distributed, Defendants assert that it does not fall within the statute's definition of satellite cable programming. Defendants further contest DIRECTV's characterization of SportsNet as somehow the "equivalent of satellite cable programming" and thereby subject to the program access provisions. Defendants argue that there is no basis in law for such an interpretation, for it renders the term "satellite" in the statute meaningless. Defendants further state that there is no basis in fact for such an interpretation, since there are significant substantive programming differences between SportsNet's terrestrial service and SportsChannel's satellite service. 21. In addition, Defendants believe that DIRECTV, without proper justification, reads the term satellite cable programming expansively in order to apply the provisions of Section 628(c) to SportsNet. Defendants argue that if a statute is unambiguous, as in this case, the clear meaning of the statute must be regarded as conclusive. Defendants cite Congress' deliberate, consistent, and repeated use of the phrase "satellite cable programming." Defendants reason that if the Commission were to extend the application of the statute to terrestrial programming, as DIRECTV argues, it would violate well established principles of statutory construction. Consequently, Defendants state that the Commission lacks jurisdiction to hear DIRECTV's Section 628(c) claim, because the Commission "can only act within the jurisdiction conferred by its enabling statute." V. DISCUSSION 22. There appear to be three interrelated matters of dispute in this proceeding: (1) Is the programming in question "satellite cable programming" so that Comcast's conduct is actionable under Section 628(c) of the program access rules? (2) Does the Commission have the authority to take action against evasions of the program access rules and, if so, is Comcast's conduct actionable as an evasion? (3) Does Comcast's conduct involve unfair or anti-competitive action to deprive DIRECTV of "satellite cable programming" under Section 628(b)? 23. Section 628 is generally understood to be a mechanism for ensuring that MVPDs that are competing with traditional cable television systems are not deprived, through exclusive contracts, discriminatory pricing, or otherwise, of access to vertically integrated "satellite cable programming." Section 628(c)(2)(A) prohibits a cable operator from unduly or improperly influencing the decision of a "satellite cable programming vendor" to sell, or the prices terms and conditions of sale, of satellite cable programming to unaffiliated MVPDs. Section 628(c)(2)(B) prohibits a "satellite cable programming vendor" in which a cable operator has an attributable interest from engaging in discrimination in the prices, terms or conditions of the sale or delivery of satellite cable programming to competing MVPDs. DIRECTV has expressed its basic agreement with Comcast "that the applicability of these provisions . . . hinges upon whether Comcast's vertically integrated affiliates, Comcast-Spectacor, L.P. and Philadelphia Sport Media, L.P., can be said to be `satellite cable programming vendors'. . ." 24. DIRECTV's complaint makes little effort to demonstrate that Comcast SportsNet is in fact "satellite cable programming." Rather, it argues that the Commission should find that the service "should be made available as the equivalent of satellite cable programming." The essence of DIRECTV's argument with respect to this point is elaborated on in reply comments where it notes that Section 628(i) defines "satellite cable programming" by reference to Section 705 of the Communications Act, a provision addressing signal piracy. Section 705 in turn defines "satellite cable programming" as "video programming which is transmitted via satellite and which is primarily intended for the direct receipt by cable operators for their retransmission to cable subscribers." DIRECTV's argument then, with citations omitted is, is as follows: . . . because Comcast SportsNet is not "transmitted via satellite," Comcast argues that the network is not "satellite cable programming," and therefore is not subject to the program access provisions of Section 628(c). Read in a vacuum, Comcast's interpretation of the text of Section 705(d) would seem plausible -- until Comcast's reading is placed in the context of the language, structure and purpose of Section 628. As the D.C. Circuit has observed, "while the immediate statutory text is the 'best evidence' of congressional intent, the Court has never held that it is the only such evidence." Other "indications of congressional intent" can create uncertainty about Congress' intended scope of a particular term that requires deference to the Commission's expert judgment and interpretation -- even when the text of the Communications Act is "superficially-clear." Along these lines, the Commission resolves interpretive questions pertaining to the program access laws by relying on not just the language of the Act but also on (i) a careful analysis of the structure of Section 628 of the 1992 Cable Act, (ii) its legislative history, and the underlying policy objectives of the 1992 Cable Act. As the Commission has observed, this "is the process that previously has been followed in implementing the provisions of the 1992 Cable Act and in developing a coherent set of rules for their enforcement." "Having made careful use of that process to assure that the various program access provisions of the 1992 Cable Act fit together in a coordinated fashion," the failure of the Commission to follow that course now could lead to "anomalous results." First, beginning with the text of Sections 628(i)(1) and 705(d)(1), the Commission need not "read the word `satellite' out of the statute," as Comcast suggests, in order to reach the conduct at issue here. While DIRECTV believes that the Commission can and should apply the program access rules to cable operators and vertically integrated programmers regardless of the distribution technology employed, the Commission need not reach that far on the instant facts, which present a clear and definable nexus of Comcast SportsNet to "satellite cable programming." Specifically, Comcast admits that 67 sports games that formerly were distributed via satellite on SportsChannel Philadelphia have now been transitioned to Comcast SportsNet. Under such circumstances, the Commission can and should interpret "satellite cable programming" to encompass such programming, given that it previously was satellite-delivered. 25. We do not find the argument that Section 628(c) was violated to be persuasive. The Supreme Court, in its Chevron decision speaks to the proper statutory interpretation analysis in situations such as this. That decision states: [f]irst, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. ... if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. We agree with DIRECTV that the applicability of Sections 628(c)(2)(A) and 628(c)(2)(B) "hinges upon whether Comcast's vertically integrated affiliates, Comcast-Spectacor, L.P. and Philadelphia Sports Media, L.P., can be said to be `satellite cable programming vendors'. . ." We believe that the correct reading of Section 628(c) is that the provisions in question apply to satellite cable programming, not programming that was "previously" satellite-delivered or the "equivalent" of satellite cable programming. The statute defines "satellite cable programming" as that which is transmitted via satellite. This reading is consistent with the legislative history of Section 628 which indicates that the version of the program access provision that the Senate adopted would have extended to terrestrially-delivered programming services but the House bill, that was eventually adopted, did not. This indicates a specific intention to limit the scope of the provision to satellite services. Given the new content of the service in question it is also not clear that this is a service which can be considered "previously" distributed by satellite. 26. The next question presented has to do with the scope of the Commission's authority to act against evasions of Section 628 and whether the conduct of Comcast could in fact be considered an evasion. Assuming for the sake of argument that the Commission has the authority to act against evasions in some circumstances (an issue the Commission has considered elsewhere), we are not persuaded here that the totality of the circumstances demonstrates an intent to evade our rules. 27. Here, for instance, we find evidence that the service in question is not simply a service that has moved from satellite to terrestrial distribution but is in fact a new service. The majority of the programming content on Comcast SportsNet is not duplicative of content on SportsChannel Philadelphia. A significant amount of the sports content on the channel consists of sports events that were on PRISM, a terrestrially delivered service, operating in the Philadelphia market for over two decades, that last season distributed some 124 games of the Philadelphia Flyers, Philadelphia 76ers and the Philadelphia Phillies. In contrast, in its last year of operation, SportsChannel Philadelphia distributed 67 such games. Comcast SportsNet is a brand new service in ownership, name, management, and content. It is described as featuring more locally-produced sports coverage -- including events, news, opinion, and programming -- than any other regional sports network in the United States. As a further departure from its predecessors, Comcast has returned 22 games of the Philadelphia 76ers back to broadcast television. 28. In addition, according to Comcast, the terrestrial distribution of this service is "dramatically less expensive than satellite distribution." An affidavit filed by Comcast, indicates that it costs approximately $600,000 per year to deliver the Comcast SportsNet service terrestrially. The cost of delivering the service would be approximately $2,280,000 per year using a full band satellite transponder, $1,400,000 using a second tier satellite transponder, or between $720,000 and $900,000 using shared digital capacity. In addition, a one time cost of $250,000 for an up-link facility would be required plus $24,000 a year to uplink and a cost of $190,000 for encoding the signal prior to uplinking it and decoding at the headend of the individual recipients. Although not cited as an extra cost by Comcast, DIRECTV itself notes if it received the service it "might be willing to share the costs of transporting the programming to Castle Rock, Colorado, where DIRECTV's satellite uplink center is located." The terrestrial infrastructure used by PRISM, according to Comcast, "had available capacity and the base of operators receiving the Service is substantially that same as that which received PRISM, so use of that network became a logistically simple and economical choice." None of these facts are disputed by DIRECTV. 29. Given all these facts, including the differences between the old and the new service, the incorporation of the old PRISM terrestrially delivered content and distribution process, and the unchallenged cost advantages of terrestrial distribution, we cannot conclude that evasive conduct is involved. 30. The final argument that DIRECTV makes is that Comcast's conduct violates Section 628(b) of the Communications Act. This provision reads as follows: It shall be unlawful for a cable operator, a satellite cable programming vendor in which a cable operator has an attributable interest, or a satellite broadcast programming vendor to engage in unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which is to hinder significantly or to prevent any multichannel video programming distributor from providing satellite cable programming or satellite broadcast programming to subscribers or consumers. 31. Although set out only very roughly in the complaint, which focuses mainly on the evasion question, the explication of this argument in its reply pleading seems to be that Sportschannel Philadelphia was a "satellite cable programming vendor" and that it was "unfair" for Comcast, as a cable operator, to have acquired rights to programming on this service, used that content to create a new terrestrial service, and thereby deprived DIRECTV of access to Sportschannel Philadelphia. 32. We are not persuaded that the facts alleged are sufficient to constitute a Section 628(b) violation. In order to find a violation of Section 628(b), the Commission must make two independent determinations. First, the Commission must determine that the defendant has engaged in unfair methods of competition or unfair or deceptive acts or practices. Second, the Commission must determine that the unfair acts or practices, if found, had the purpose or effect of hindering significantly or preventing a MVPD from providing satellite cable programming to subscribers or consumers. Here, we do not believe that the record supports a conclusion that Comcast has engaged in unfair or deceptive acts in creating, packaging and distributing Comcast SportsNet. In enacting Section 628, Congress determined that while cable operators generally must make available to competing MVPDs vertically-integrated programming that is satellite- delivered, they do not have a similar obligation with respect to programming that is terrestrially -delivered. DIRECTV's argument would have us find that it is somehow unfair for a cable operator to move a programming service from satellite delivery to terrestrial delivery if it means that a competing MVPD may no longer be afforded access to the service. We find no evidence in Section 628 that Congress intended such a result. Congress did not prohibit cable operators from delivering any particular type of service terrestrially, did not prohibit cable operators from moving any particular service from satellite to terrestrial delivery, and did not provide that program access obligations remain with a programming service that has been so moved. Thus, given our prior finding that Comcast's actions do not amount to an attempt to evade our rules, we decline to find that, standing alone, Comcast's decision to deliver Comcast SportsNet terrestrially and to deny that programming to DIRECTV is "unfair" under Section 628(b). 33. Section 628(b) remains, as the Commission has stated previously, "a clear repository of Commission jurisdiction to adopt additional rules or to take additional action to accomplish statutory objectives should additional types of conduct emerge as barriers to competition and obstacles to the broader distribution of satellite cable and broadcast programming." It cannot, however, be converted into a tool that, on a per se basis, precludes cable operators from exercising competitive choices that Congress deemed legitimate. VI. ORDERING CLAUSES 34. Accordingly, IT IS ORDERED, that the complaint filed in CSR 5112-P by DIRECTV IS DENIED. 35. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Deborah A. Lathen Chief, Cable Services Bureau