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This Memorandum Opinion and Order observes the requested  xconfidentiality. The parties also submitted redacted copies of their pleadings for inclusion in the Commission's public file." , * *,,"Ԍ S( ` ԙ2.` ` The Networks filed an answer arguing that Echostar failed to state any cognizable claim  xfor violation of the Commission's program access rules and, accordingly, its complaint should be  S( xdismissed with prejudice. EchoStar filed a reply pleading. yO( x`ԍBoth parties requested and were granted extensions of time in which to file their responsive pleadings. The  {O( xxNetworks were granted a two week extension of time in which to file an answer to EchoStar's complaint. EchoStar  {O( x,v. Speedvision et al., Memorandum Opinion and Order, DA 99262 (released February 1, 1999). Likewise, EchoStar  {O^( xwas granted a two week extension of time in which to file its reply pleading in this matter. EchoStar v. Speedvision  {O(( xzet al., Memorandum Opinion and Order, DA 99508 (released March 16, 1999). EchoStar also later filed a supplemental reply.  Because of the pendency of a breach of  xcontract suit between the parties in federal district court, the Networks filed a "Motion to Dismiss or, in  S4( xthe Alternative, to Hold Proceeding in Abeyance Pending Resolution in Federal District Court."4H {O ( xԍSee Outdoor Life Network, L.L.C. and Speedvision Network, L.C.C. v. EchoStar Satellite Corporation and  {O (EchoStar Communications Corporation, No. 3:98CV2378(AHN). EchoStar  S( xfiled an opposition to the motion. yOE( x*ԍThe Networks also submitted a "Reply Memorandum" in support of their Motion to Dismiss or Hold in Abeyance. For the reasons discussed below, EchoStar's program access complaint is denied.  Sh( II.BACKGROUND  S( ` 3.` ` Congress enacted the Cable Television Consumer Protection and Competition Act of 1992  S( x("1992 Cable Act") to promote competition, with the view that regulation would be transitional until the  S ( xvideo programming distribution market becomes competitive.z Z  {O:( xԍ1992 Cable Act  2(b)(2), 106 Stat. 1463. See Communications Act  601(6), 47 U.S.C.  521(6) ("The  xtpurposes of this title are to . . . (6) promote competition in cable communications and minimize unnecessary regulation that would impose an undue economic burden on cable systems."). z By enacting the program access provisions,  Sk ( xNwhich are codified in Section 628 of the Communications Act,; k  yO)(ԍ47 U.S.C.  548.; Congress sought to minimize the  xincentive and ability of vertically integrated programming suppliers to favor affiliated cable operators over  xnonaffiliated cable operators or other multichannel video programming distributors ("MVPDS") in the sale  S (of satellite cable and satellite broadcast programming.g  yO (ԍ1992 Cable Act  2(a)(2), 2(b)(5), 106 Stat. 1460, 1463.g  Sl(4.` ` In Section 628(b) of the Communications Act, Congress states that:  LXIt 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  Bto 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  S(programming to subscribers or consumers.= > yO&(ԍ47 U.S.C.  548(b)= " ,l(l(,,<"Ԍ` ` In Section 628(c)(2), Congress instructed the Commission to promulgate regulations that:  8X(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  S(programming to any unaffiliated multichannel video programming distributor; [and]E  yO6(ԍ47 U.S.C.  548(c)(2)(A). E   zX(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  Rbroadcast programming among or between cable systems, cable operators, or other  S (MVPDs or their agents or buying groups . . . .* X yO ( xZԍ47 U.S.C.  548(c)(2)(B). Congress provided limited exceptions to this prohibition. A satellite programming vendor or satellite broadcast programming vendor is not prohibited from:  X(i) imposing reasonable requirements for creditworthiness, offering of service, and financial  stability and standards regarding character and technical quality; (ii) establishing different prices,  @terms, and conditions to take into account actual and reasonable differences in the cost of creation,  sale, delivery, or transmission of satellite cable programming or satellite broadcast programming;  (iii) establishing different prices, terms, and conditions which take into account economies of scale,  hcost savings, or other direct and legitimate economic benefits reasonably attributable to the number  ,of subscribers served by the distributor; or (iv) entering into an exclusive contract that is permitted under subparagraph (D) [of this section].   {O(Id.    S6 ( ` 5.` ` In Implementation of Sections 12 and 19 of the Cable Television Consumer Protection and  xCompetition Act of 1992: Development of Competition and Diversity in Video Programming Distribution  S ( x$and Carriage, Report and Order, MM Docket No. 92265 (Program Access Order),> J  yO(ԍ8 FCC Rcd 3359 (1993).> the Commission  x$concluded that nonprice discrimination is included within the prohibition against discrimination set forth  x&in Section 628(c)(2)(B). While the Commission did not attempt to identify all types of nonprice  x$discrimination that could occur, the Commission stated that "one form of nonprice discrimination could  x`occur through a vendor's `unreasonable refusal to sell,' or refusing to initiate discussions with a particular  xLdistributor when the vendor has sold its programming to that distributor's competitor." The Commission  x.cautioned, however that "`unreasonable' refusals to sell" should be distinguished from "certain legitimate  Sm( xreasons that could prevent a contract between a vendor and a particular distributor.";m {O"(ԍId. at 3412.; Such legitimate reasons would include:  tX(i) the possibility of 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"nl,l(l(,,X"  S(exclusive arrangement or a specific distributor.E {Oh(ԍId. (footnote omitted).E   S( ` 6.` ` The term "satellite cable programming" is video programming which is transmitted via  xsatellite and which is primarily intended for the direct receipt by cable operators for their retransmission  S4( xjto cable subscribers.]4Z yO.(ԍ47 U.S.C.  605(d)(1); 47 C.F.R. 76.1000(h). ] The term "satellite broadcast programming" is broadcast programming when such  xprogramming is retransmitted by satellite and the entity retransmitting such programming is not the  x`broadcaster or an entity performing such retransmission on behalf of and with the specific consent of the  S(broadcaster.\ yO% (ԍ47 U.S.C.  548(i)(3); 47 C.F.R.  76.1000(f).\  S5( III.THE FACTS  S( ` L7.` ` EchoStar is a direct broadcast satellite ("DBS") provider that offers multichannel video  S ( xprogramming distributor ("MVPD") service throughout the United States.7 z yO(ԍComplaint at 2.7 EchoStar operates four  Si ( x.satellites that allow it to offer hundreds of channels of digital television programming to its subscribers.1i  {O(ԍId.1  x\As an MVPD, EchoStar competes against cable operators and other MVPDs in each and every cable  S (franchise area, as well as against other DBS providers.L   {O?( xnԍId. On April 27, 1999, the Networks filed a "Motion for Leave to Supplement Defendants' Answer and Motion  x to Dismiss." As an exhibit to their motion, the Networks attach EchoStar's responses to the Networks' first set of  x(interrogatories in the parties' federal district court case. Referring to the interrogatories, the Networks argue that  xjEchoStar asserted in the federal district court action that it was not a party to the agreement at issue and did not  xdistribute programming services at any time in this matter. The Networks argue that EchoStar is not a MVPD and  xtherefore does not have standing to file a program access complaint. On May 7, 1999, EchoStar filed an "Opposition  xto Motion for Leave to Supplement Defendants' Answer and Motion to Dismiss" and "Motion to Supplement  xComplaint." EchoStar argues that while it was not the signatory to the agreement at issue with the Networks, the  xZsignatory was EchoStar Satellite Corporation ("ESC") which is whollyowned by EchoStar. ESC is a whollyowned  xsubsidiary of EchoStar DBS Corporation, which is in turn, a whollyowned subsidiary of EchoStar. In its "Motion  xto Supplement Complaint," EchoStar requests that ESC be added as a joint complainant to its program access  xcomplaint. In response, on May 17, 1999, the Networks filed "Defendants' Reply in Support of Motion for Leave  xto Supplement and Response to Complainant's Motion to Supplement" to which EchoStar filed a reply on May 24,  yOi (1999. In light of our action in this proceeding, we do not address this issue.   L  S ( ` 8.` ` The Networks are satellite cable programming vendors.X V yO#( xԍComplaint at 2, 7; Networks Answer at 6. The term "satellite cable programming vendor" means a person  xZengaged in the production, creation, or wholesale distribution for sale of satellite cable programming, but does not include a satellite broadcast vendor. 47 U.S.C.  548(i)(2); 47 C.F.R.  76.1000(i). Speedvision is a network that  Sj(provides comprehensive coverage of the automotive, motorcycle, aviation and marine industries.Xjv yO'(ԍComplaint at 2, Exhibit 1; Networks Answer at 6.X "j,l(l(,,"Ԍ xOutdoor Life is a network that features outdoor recreational activities, including cycling, fly fishing,  S( xsailing, skiing, snowboarding and windsurfing.X yO5(ԍComplaint at 3, Exhibit 2; Networks Answer at 6.X Speedvision is owned by TMJV, Inc. (affiliated with Cox  x`Communications, Inc.), Comcast Programming Ventures, Inc., Fostoria Communications, Inc. (affiliated  xwith MediaOne, Inc.), Daniels Properties, L.L.P., Fox/Liberty SV, L.L.C. (affiliated with AT&T, formerly  S4( x4TeleCommunications, Inc.), and Roger Werner.|Z4X {O,( xdԍNetworks Answer at 6; see also Complaint at 3. On February 18, 1999, the Commission approved the transfer  xof Commission licenses and authorizations from TeleCommunications, Inc. ("TCI") to AT&T in connection with the companies' planned merger. On March 9, 1999, AT&T and TCI consummated the merger. | Outdoor Life is owned by TMJV, Inc., Comcast  S( xdProgramming Ventures, Inc., Fostoria Communications, Inc., Fox/Liberty OL, L.L.C., and Roger Werner.1z {O (ԍId.1  x\Fox/Liberty Networks, which has a onethird ownership interest in the Speedvision and Outdoor Life  xNetworks, is 50 percent owned by AT&T, one of the largest cable multiple system operators ("MSOs")  Sh( xin the United States.4h  {O(ԍId.  4 The Commission has determined previously that the ownership interests in the  xNetworks constitute an "attributable interest," as defined in Section 76.1000(b) of the Commission's rules,  x4thereby making the Networks vertically integrated satellite cable programming vendors subject to the  S(Commission's program access rules. {O ( xԍSee Outdoor Life Networks and Speedvision Network (Petition for Exclusivity pursuant to 47 C.F.R.   {O(76.1002(c)(4) and (5), 13 FCC Rcd 12226, 122278 (1998).  Si ( ` j9.` ` On November 18, 1998, the Networks and EchoStar entered into an agreement for the  S6 ( xcarriage of the Networks' programming.86  yO(ԍComplaint at 8. 8 While the agreement prohibited the carriage of the Networks  xon an a la carte basis, it permitted EchoStar to carry the programming in one of three ways: 1) on  x4EchoStar's expanded basic package; 2) on a specialty tier of programming later known as EchoStar's  S ( x"Action Plus" package; or, 3) on a sports tier.BZ  {O( x ԍId. at 910. Both parties have requested confidentiality with regard to the precise terms of the November 18,  x1998 agreement attached as Exhibit 10 to the Complaint. As such, we will only refer to the agreement in its most general terms. B On December 2, 1998, EchoStar launched its "Action  Sj(Plus" package which included both Speedvision and Outdoor Life in its programming lineup. "j {O( x8ԍId. at 10. EchoStar states that in addition to Speedvision and the Outdoor Life Network, the "Action Plus"  xpackage programming lineup also included Outdoor Channel, a cable network unaffiliated with Speedvision, and  xAngel One which is another unaffiliated channel available to all EchoStar subscribers and included in all other Echostar packages.   S( ` 10.` ` On December 7, 1998, following the discovery of an alleged breach of the agreement  x`regarding the packaging of the Networks' programming, the Networks deauthorized EchoStar's reception  S( xof Speedvision and Outdoor Life.O! {O&(ԍId. at 11; Networks Answer at 11.O According to EchoStar, approximately 23,000 "Action Plus" package"(!,l(l(,, "  S(subscribers were left without service.G"X yOh( xԍComplaint at 11. The Networks state that they lack knowledge or information sufficient to form a belief as  xto the number of EchoStar subscribers that subscribed to the "Action Plus" package and therefore deny those allegations. Networks Answer at 10. G The Networks alleged that EchoStar had not properly packaged  x$its programming because in addition to the Networks, only one other programming service was included  xin the package when EchoStar was to have included at least two other programming services other than  Sg( x&Outdoor Life and Speedvision.#g yO( xԍComplaint at 1415, Exhibit 11 (Letter from Burt A. Braverman to Michael S. Schwimmer, December 7, 1998); Networks Answer at 11. The Networks also alleged that EchoStar violated the a la carte  S4( xprohibition of the agreement.i$Z4@ {O ( xfԍId. The Networks allege that EchoStar offered "any or all" of the services comprising the "Action Plus"  x`package, in violation of the a la carte prohibition of the agreement. Complaint, Exhibit 11 (Letter from Burt A. Braverman to Michael S. Schwimmer at p. 2, December 7, 1998). i Also, on December 7, 1998, the Networks filed a complaint against  S( xVEchoStar in the United States District Court for the District of Connecticut alleging, inter alia, breach of  S(contract, fraudulent inducement and trademark infringement.$%b  {O( xԍComplaint at 12; Networks Answer at 1112. See Outdoor Life Network, L.L.C. and Speedvision Network,  {O(L.L.C. v. EchoStar Satellite Corporation and EchoStar Communications Corporation, No. 3:98CV2378(AHN).  $  Si( ` 11.` ` On December 9, 1998, in a letter sent to the Networks, EchoStar offered to add another  S6( xprogramming service to the "Action Plus" package.&6  yO(ԍComplaint at 14, Exhibit 13 (Letter from Michael S. Schwimmer to E. Roger Williams, December 9, 1998). In a letter dated December 11, 1998, the Networks  xBrejected EchoStar's offer by stating its position that the agreement was breached and therefore void, and  xthat it was too late to remedy EchoStar's noncompliance by adding another programming service to the  S ( x.package.' N  {O(ԍId. at 14, Exhibit 14 (Letter from Burt A. Braverman to David K. Moskowitz, December 11, 1998). After providing the Networks with the requisite ten days notice of its intent to file a program  Sj (access complaint, EchoStar filed the instant complaint on January 14, 1999.L(j  {O(ԍSee 47 C.F.R.  76.1003(a).L  S ( IV.ARGUMENTS OF THE PARTIES  S ( ` 212.` ` EchoStar alleges that the Networks have unreasonably refused to offer their programming  xto EchoStar on fair and nondiscriminatory rates, terms and conditions in violation of Section 628(c)(2)(B)  S8( xVof the Communications ActD)8r yOJ!(ԍ47 U.S.C. 548(c)(2)(B). D and Section 76.1002(b) of the Commission's rules.S*8 yO"(ԍComplaint at 17; 47 C.F.R.  76.1002(b).S EchoStar argues that  xRthe Networks' unilateral termination of their programming and their continuing refusal to provide it to  xEchoStar constitutes an unreasonable refusal to deal which is recognized by the Commission as a form  S( xLof nonprice discrimination.w+ {O&(ԍComplaint at 17; see also Program Access Order, 8 FCC Rcd at 3364. w According to Echostar, the Networks' allegations of contractual breach do  xnot excuse cableaffiliated programming vendors, such as the Networks, from the obligation to provide"l$+,l(l(,,"  S( xtheir programming to a MVPD, such as EchoStar, in a fair and nondiscriminatory manner.9, yOh(ԍComplaint at 19. 9 EchoStar  xcontends that the Networks have the option of pursuing their legal claims for alleged breach of contract  S(in court while still allowing EchoStar to carry the Networks' programming.1-X {O(ԍId.1  S4( ` 13.` ` Although EchoStar denies the alleged breach of contract, EchoStar states that, in a spirit  xof compromise, it has offered to carry the Networks' programming in a manner that is indisputably  xconsistent with the Networks' interpretation of the contract. In that regard, EchoStar states that it has  xoffered to include one more programming service the WingSpan aviation channel in the "Action Plus"  Sh( xpackage.1.h {O (ԍId.1 However, the Networks have rejected EchoStar's offer and EchoStar claims that the Networks'  xrefusal to provide its programming even on the terms that the Networks maintain is required by the  S( xcontract evidences lack of good faith on the part of the Networks.O/| {O(ԍId. at 2021; EchoStar Reply 25.O Furthermore, EchoStar contends that  xas a matter of industry practice in the programming distribution area, a programmer does not terminate  xits relationship with an allegedly breaching distributor before giving the distributor an opportunity to  Si (conform its conduct to the programming vendor's reading of the programming agreement.80i  yO(ԍComplaint at 20.8  S ( ` `14.` ` EchoStar also alleges that the Networks have engaged in unfair practices in violation of  S ( xSection 628(b) of the Communications Act and Section 76.1001 of the Commission's rulesV1  yO(ԍ47 U.S.C.  548(b); 47 C.F.R.  76.1001.V because they  xhave terminated distribution of their programming to EchoStar and since that termination consistently have  Sj( xrefused to allow EchoStar access to their programming.T2j.  yO8(ԍComplaint at 2122; EchoStar Reply at 3133.T EchoStar notes that Section 628(b) of the  xCommunications Act was intended to be a repository of "Commission jurisdiction to adopt additional rules  x~or to take additional actions to accomplish statutory objectives should additional types of conduct emerge  xas barriers to competition and obstacles to the broader distribution of satellite cable and broadcast video  S( xprogramming."i3  {O(ԍComplaint at 22, citing Program Access Order at 3374.i Thus, with regard to the distribution of the Networks' programming, EchoStar alleges  xthat the Networks' unfair conduct has prevented EchoStar from serving consumers which EchoStar argues  S8( xfis the core constituency intended to be protected by the program access laws.848P  yO("(ԍComplaint at 22.8 EchoStar argues that  xLbecause of the Networks' conduct, EchoStar's subscribers were deprived of the Networks' programming  xfive days after they purchased it and started to receive it, and as a result EchoStar was inundated with  S(complaints that it was powerless to resolve.85 {O&(ԍId. at 23.8 "lr5,l(l(,, "Ԍ S( ` d15.` ` EchoStar further argues that the Networks' unfair conduct has prevented it from launching  S( x.the specialty tier that it planned to build around the Networks' programming.;6 {O5(ԍId. at 2223.; EchoStar argues that the  x>Networks' programming is important for the purpose of attracting large categories of consumers with  xspecial interests. For instance, EchoStar notes that the NASCAR races covered by Speedvision are among  S4( xthe nation's most watched and fastest growing sports events on television.r7^4Z {O.( xԍId. at 23. EchoStar cites several articles attesting to the popularity of NASCAR races: Steve Goldberg, Time,  {O( x(June 15, 1998); Bob McClellan, The Florida TimesUnion, (June 5, 1998); and, Hilary Kraus, The Spokesman {O(Review, (July 26, 1998). r In addition, EchoStar asserts  S( xthat Outdoor Life Network is a leader in outdoor adventure programming.28 {O! (ԍId. 2 Therefore, without the  xNetworks' programming, EchoStar argues that it is at a competitive disadvantage with competing MVPDs  xthat carry the Networks' programming in "digital cable" and other tiers outside their expanded basic  Sh(package.19h {O(ԍId.1  S( ` F16.` ` Finally, EchoStar requests damages for the harm it alleges to have suffered because of the  S( xVNetworks' alleged unfair and discriminatory conduct in this matter.':$ yO( xԍEchoStar notes that the Commission recently affirmed its authority to impose damages in program access cases  xfor violations of Section 628 where it is necessary to remedy the harm stemming from a programmer's anti {O( xcompetitive conduct. Implementation of the Cable Television Consumer Protection and Competition Act of 1992:  {Om(Petition for Rulemaking of Ameritech New Media, Inc., 13 FCC Rcd 15822, 15829 (1998).   ' EchoStar states that it has suffered  x~damages in the form of refunds and credits that it had to pay the 23,000 customers that subscribed to the  Si ( x"Action Plus" package at the time of its termination.8;i  yO(ԍComplaint at 26.8 EchoStar also claims loss of profits for the program  xpackage from these customers, as well as for additional subscribers that EchoStar states that it would have  S ( xvsecured with this programming.1<  {O(ԍId.1 In addition, EchoStar also claims loss of profit from disgruntled  xsubscribers who EchoStar believes may have abandoned its programming altogether because of the  S ( xBtermination of the Networks' programming.1=  {O(ԍId.1 EchoStar also requests damages for marketing costs, both  xoutofpocket and overhead that were incurred to promote the Networks' programming; overhead expenses  xincurred for handling the consequences of the Networks' conduct, such as the cost of processing phone  S(calls from affected customers; and, the loss of goodwill.>D {O"( xԍId. EchoStar states that it is still in the process of calculating and assessing some categories of claimed  yO#( xdamages. However, in accordance with 47 C.F.R.  76.1003(c)(5), EchoStar has provided the Commission with  x|computations and documentation with respect to certain damage categories that EchoStar states were easy to ascertain.  xEchoStar requests that its claim for damages to the Commission be without prejudice to its ability to claim these  xdamages in court and/or to request any other additional damages in the future before this Commission or in court.  {O&(Id. at 2627.  ">,l(l(,,v"Ԍ S( `  17.` ` The Networks respond by asserting that their decision to deauthorize EchoStar's carriage  xjof the Networks' programming does not constitute an unreasonable refusal to deal in a nondiscriminatory  S( xmanner or constitute an unfair practice under the Commission's program access rules.>? yO(ԍNetworks Answer at 19.> The Networks  xargue that their decision was lawful and an appropriate business response to what they allege to be  S4( x*EchoStar's breach of the clear and express terms of the parties' contract.1@4X {O,(ԍId.1 Moreover, the Networks  xcontend that the action they took was necessary to protect their reputation and the good will that they have  S( xearned with viewers, advertisers, program suppliers and other distributors.7A {OX (ԍId.7 The Networks also note that  xthey have pursued carriage on EchoStar for over three years and that throughout that period they made  xat least 14 formal offers of carriage to Echostar until the parties finally signed a mutually acceptable  S5(agreement on November 18, 1998.AB5| {OQ(ԍId. at 2, 20.A  S( ` 18.` ` Specifically, the Networks argue that their actions in this matter do not constitute an  xunreasonable refusal to deal because the deauthorization of EchoStar's receipt of their signals occurred  Si ( xafter EchoStar breached a crucial packaging condition of their agreement.8Ci  {O(ԍId. at 49.8 The Networks note that in  xadopting the program access rules, the Commission recognized that there are certain situations in which  xa vertically integrated programming vendor would be justified in refusing to deal with a distributor, such  S ( x$as when parties reach an "impasse on particular terms."kD  {O(ԍId.; see Program Access Order, 8 FCC Rcd at 3412.k In this case, the Networks argue that where a  x&programming distributor, such as EchoStar, breaches the express, material terms of a distribution  x.agreement and federal court litigation ensues, an impasse has clearly occurred and the Networks' refusal  S7(to deal with such a distributor is reasonable.1E72  {O (ԍId.1  S( ` < 19.` ` The Networks argue further that their signal deauthorization is reasonable after the breach  S( xof such an important condition under general principles of contract and antitrust law.8F  {O(ԍId. at 50.8 The Networks  xassert that under contract law, a contracting party's failure to abide by a condition or material term of that  S8( xcontract is grounds for nonperformance by the other party to the contract.eG(8V  {O."( xԍId., citing Rokalor, Inc. v. Connecticut Eating Enterprises, Inc., Inc., 18 Conn. App. 384, 39192, 558 A.2d  {O"( x265 (1989); Aleysayi Beverage Corp. v. Canada Dry Corp., 947 F.Supp. 658, 667 (S.D.N.Y. 1996); Jafari v. Wally  {O#( xFindlay Galleries, 741 F.Supp. 64, 68 (S.D.N.Y. 1990); Crown Life Ins. Co. v. American National Bank and Trust  {O$(Co., 830 F.Supp. 1097 (N.D.Ill 1993); and, U.S. v. Bedwell, 506 F.Supp. 1324, 1327 (E.D.Pa. 1981).e In addition, the Networks  xcontend that breach of contract has been found to constitute a reasonable ground upon which vertically" FG,l(l(,,"  S( x`integrated programming vendors may refuse to distribute programming to DBS providers.>H yOh(ԍNetworks Answer at 51.> Specifically,  xthe Networks refer to the Primestar Consent Decree, approved by the United States District Court for the  xSouthern District of New York, as an example where breach of contract was considered a reasonable basis  xupon which PrimeStar Partners, L.P. could refuse to distribute programming to DBS or MMDS  S4( xproviders.lI4 4X {O,( xԍId.; see New York v. Primestar Partners, L.P., 1993 U.S. Dist. LEXIS 21122, *18 (S.D.N.Y. 1993) (finding  {O( xthat the Primestar partners could refuse to deal with DBS or MMDS providers where such "prospective provider is  {O( x"in breach of any contract" with the Primestar programming entity)(emphasis added). The Primestar Consent Decree  xsettled an antitrust case between the Primestar Partners and 40 states' attorneys general. The Networks note that  x<some of their owners are Primestar Partners and were bound by the consent decree until it expired. The Networks  xnargue that while the Commission expressed concern over that portion of the Consent Decree that permitted certain  xexclusive distribution agreements, the Consent Decree is still persuasive authority concerning what constitutes a  {O ( xreasonable refusal to deal under antitrust law. Id., n. 35. EchoStar argues that the Commission has never recognized  yOt ( xallegations of contractual breach as justification for refusal to deal. EchoStar Reply at 12. Moreover, EchoStar  x^contends that the consent decree at issue permitted Primestar to refuse to deal in circumstances where a programming  {O( xvendor would be prohibited from doing so under the program access laws. Id., n. 22. In addition, EchoStar argues  x2that a negotiated consent agreement has no more precedential value than any agreement in settlement of litigation.  {O(Id.; see Beatrice Foods Co. v. Federal Trade Commission, 540 F.2d 303, 312 (7th Cir. 1976).   l The Networks also assert that under antitrust law, a party may refuse to deal with another  S(entity where a valid business justification exists.J~T  {O( xnԍNetworks Answer at 51; see, e.g., Byars v. Bluff City News Co., 609 F.2d 843, 863 (6th Cir. 1979) ("A finding  x~of antitrust liability in a case of a refusal to deal should not be made without examining business reasons which  xmight justify the refusal to deal."). The Networks also cite several cases where the courts have found valid business  {OO( x6justifications to exist in refusal to deal cases. See, e.g., Arthur S. Langenderfer v. S.E. Johnson Co., 917 F.2d 1414,  x@1427 (6th Cir. 1990) (claim for refusal to deal is inextricably bound with commercial disputes and contract disputes);  {O( xHomefinders of America, Inc. v. Providence Journal Co., 621 F.2d 441, 443 (1st Cir. 1980) (not unreasonable for a newspaper to refuse misleading advertising that offends its readers).   S( ` 20.` ` The Networks also contend that their decision to deauthorize EchoStar's receipt of their  x`programming after a contractual breach does not constitute an unfair practice under the Communications  S5( xAct and the Commission's rules.?K5 yOo(ԍNetworks Answer at 58. ? The Networks argue that their refusal to provide programming after  xtEchoStar's alleged breach was reasonable and if the Commission agrees, it cannot find that the Networks  S( xacted unfairly in violation of the prohibition on unfair acts or practices.1L* {O(ԍId.1 The Networks assert that  xSection 628(b) of the Act was not intended as a mechanism to declare unfair that which is permitted under  Si ( xthe Act's specific provisions.1Mi  {O"(ԍId.1 The Networks argue that the Commission has ruled that actions that are  xlegal under one section of the program access rules should not be considered illegal under the broad unfair  S ( xpractices language of Section 628(b).N N {O%( xԍId. at 5859 citing American Cable Co. and Jay Copeland v. TeleCable of Columbus, Inc., 11 FCC Rcd 10090 (1996). In that regard, the Networks contend that EchoStar has not alleged  xany facts or circumstances in their unfair practices allegation that are not encompassed by their" N,l(l(,,R "  S( xunreasonable refusal to deal or nonprice discrimination allegation.8O {Oh(ԍId. at 59.8 Accordingly, the Networks argue  x>that if the Commission finds that the Networks' refusal to provide programming to EchoStar was not  x\unreasonable, then consequently the Commission cannot find that the Networks acted unfairly in this  Sg(matter.1PgZ {Oa( xԍId. The Networks also note that while EchoStar primarily alleges that the Networks engaged in an unreasonable  xrefusal to deal, allegations raised in the complaint could also be construed as an attempt to assert a price  x~discrimination complaint. Networks Answer at 59, referring to Complaint at 6, 18 and  11,  33 and Exhibit 5.  xThe Networks argue that EchoStar has not demonstrated that the Networks are offering more favorable packaging  yO ( xterms to cable operators or other MVPDs. The Networks argue that the Commission should not permit EchoStar  xto turn this proceeding into a price discrimination matter forcing the Networks to expose all of the prices, terms and  yO ( xconditions contained in agreements with distributors similarly situated to EchoStar. The Networks assert that  x~EchoStar has not alleged facts or circumstances in its complaint to warrant such an intrusion into the Networks'  xproprietary operations. We agree with the Networks that EchoStar has not alleged sufficient facts or circumstances to make a price discrimination complaint. 1  S4(   S( V.DISCUSSION  S( ` 21.` ` For the reasons discussed below, we deny EchoStar's program access complaint against  xthe Networks. The Commission recognizes that Section 628(c)'s prohibition against discrimination also  S5(encompasses forms of nonprice discrimination.>Q5  yO(ԍ47 U.S.C.  548(c).> In that regard, the Commission has stated:  BX[W]e believe that one form of nonprice discrimination could occur through a vendor's  "unreasonable refusal to sell," including refusing to sell programming to a class of  *distributors, or refusing to initiate discussions with a particular distributor when the  vendor has sold its programming to that distributor's competitor. We believe that the  Commission should distinguish "unreasonable" refusals to sell from certain legitimate  Rreasons that could prevent a contract between a vendor and a particular distributor,  including (i) the possibility of parties reaching an impasse on particular terms, (ii) the  `distributor's history of defaulting on other contracts, or (iii) the vendor's preference not  to sell a program package in a particular area for reasons unrelated to an existing  S(exclusive arrangement or a specific distributor.\R  {O((ԍProgram Access Order, 8 FCC Rcd at 3412.\   S( ` ` 22.` ` We note at the outset that this is not the usual "refusal to deal" or "refusal to sell" case.  xThis is not a matter where programming vendors, such as the Networks, refused to sell their programming  x$to a distributor, such as EchoStar, or refused to initiate discussions about the sale of programming when  xthe vendors have sold their programming to that distributor's competitor. Instead, in the instant case, after  x$three years of negotiations between the parties and 14 formal offer of carriage made from the Networks  S( xto EchoStar, the parties entered into a mutually acceptable agreement on November 18, 1998.SX yOU%( xԍComplaint at 79 and Reply 1415; Networks Answer 2, 9 and 20. Both EchoStar and the Networks argue  xBextensively with regard to the fairness of the negotiations between the parties, whether the Networks provided  xEchostar with nondiscriminatory rates and terms compared to other distributors, and on whose terms the parties"&R,l(l(&"  xultimately reached agreement on November 18, 1998. For our purposes in this matter, our interest is limited to the fact that the parties actually reached an agreement regarding carriage of the Networks' programming by EchoStar.  Thus," S,l(l(,,"  xdespite the length of negotiations, the Networks did deal with EchoStar and ultimately sold both  xSpeedvision and Outdoor Life programming to EchoStar on terms agreed to by both parties. If not for  xlthe alleged breach of contract on the part of EchoStar, the Networks would still be providing their programming to EchoStar.  S( ` 23.` ` Nonetheless, EchoStar argues that the Networks' unilateral termination of their  xprogramming and their continuing refusal to provide that programming, even after an alleged breach of  xtcontract, constitutes an unreasonable refusal to deal which is recognized by the Commission as a form of  xnonprice discrimination. The record reveals that the Networks' breach of contract action was filed more  xthan a month before EchoStar's program access complaint. While the Commission's jurisdiction to  xresolve program access disputes is not subject to question, the resolution of EchoStar's program access  xcomplaint is inextricably intertwined with the reasonableness of the Networks' actions resulting from  xEchoStar's alleged breach of contract. The Commission cannot resolve EchoStar's program access  x^complaint without making factual determinations related to the actions of the parties under the  xprogramming contract. Where, as here, a court of competent jurisdiction first has been presented with the  xLsame set of operative facts that constitute a program access case which involves a material breach and is  xnot evidently interposed for purposes of evading or delaying the Commission's exercise of jurisdiction,  xwe will not substitute our judgment on these issues for that of the court. The federal court has jurisdiction  xto examine the parties' contractual dispute and determine whether EchoStar breached a material term of  xVthe November 18, 1998 agreement. While we understand EchoStar's concern that during the time when  xvthis dispute is pending in federal court some of EchoStar's subscribers will be denied access to the  xNetworks' programming, we do not believe that our program access rules were designed to force a  xpprogramming vendor to continue to provide its programming to a distributor during the pendency of a  Sk( xnonfrivolous breach of contract action on an underlying programming contract. Tk  yO+( x8ԍThe Bureau recently requested that both EchoStar and the Networks provide a report as to the status of the  xbreach of contract suit and related litigation that is pending in federal court between the parties. The Networks report  xthat under the "Case Management Plan" agreed to by the parties, which has been submitted to the Court for approval,  xndiscovery must be completed by September 8, 1999; dispositive motions, if any, must be filed by October 8, 1999;  {OK( xand the parties are required to have the matter ready for trial no later than December 7, 1999. April 14, 1999 Letter  {O( xfrom Burt A. Braverman, Esq. In its response, EchoStar does not dispute this schedule, but argues that the case will  xZnot go to trial for many months after the trial readiness date due to what EchoStar refers to as a substantial backlog  {O( xin the Court's docket. April 19, 1999 Letter from Pantelis Michalopoulos, Esq. The Networks respond by arguing  xthat apart from being unsubstantiated, EchoStar's assertion regarding the actual trial date did not comport with the  {O9( xinformation that the Networks received regarding the calendar of the Senior Judge assigned to the case. April 20,  {M(1999 Letter from Burt A. Braverman, Esq.   Our decision is without  xBprejudice to EchoStar filing a program access complaint after the contractual dispute between the parties is resolved by the federal district court.  S( ` .24.` ` With regard to EchoStar's allegation that the Networks engaged in unfair practices, we  x~agree with the Networks that EchoStar has not alleged any facts or circumstances in connection with that  xallegation that are not encompassed by their unreasonable refusal to sell or nonprice discrimination  xallegation. In view of our decision on EchoStar's nonprice discrimination claim, we find it unnecessary to address this allegation. " T,l(l(,,"  S( VI.ORDERING CLAUSES  S( ` V25.` ` Accordingly, IT IS ORDERED that the program access complaint filed by EchoStar  Sg( xpagainst Speedvision Network, L.L.C. and Outdoor Life Network, L.L.C. IS DENIED WITHOUT  S4(PREJUDICE.  S( ` 26.` ` IT IS FURTHER ORDERED that the Motion to Dismiss or, in the Alternative, to Hold  x Proceeding in Abeyance Pending Resolution in Federal District Court filed by Speedvision Network,  Sh(L.L.C. and Outdoor Life Network, L.L.C. IS DISMISSED AS MOOT.  S( ` 27.` ` This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated  S(by Section 0.321 of the Commission's rules.=U yO7 (ԍ47 C.F.R.  0.321.=  h` `  ,hhhFEDERAL COMMUNICATIONS COMMISSION ` `  ,hhhDeborah A. Lathen ` `  ,hhhChief, Cable Services Bureau