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Terrestrial, But No Loophole

7/25/2009 2:00 AM Eastern

To the Editor:

We disagree with Kent Gibbons’ expressed view that federal law should be changed, and several other points he makes in his recent “Viewpoint” column. (“High [Definition] Time for Change,” July 20, 2009, page 36.)

The so-called “terrestrial loophole” Mr. Gibbons references is not a loophole. Under normal marketplace rules, companies are free to make significant, high-risk investments in innovative new offerings — like Cablevision Systems began doing with high-definition sports programming in the late 1990s, when very few people had HD television sets — and choose not to share these innovations with competitors, instead using the new offerings to differentiate their products in the marketplace. While Congress deviated from these normal rules when it enacted the program access law, it was careful to clearly limit the exception to satellite-delivered programming.

For decades, TV and other media companies have used distinctive content and technological offerings to distinguish their services from those of their competitors and attract customers. Verizon Communications itself aggressively advertises that it carries certain programming that Cablevision does not, including the NFL Network, and DirecTV — a company more than four times Cablevision’s size — loudly proclaims that it is the exclusive source of the “NFL Sunday Ticket” package. The list goes on and on.

We wonder if Mr. Gibbons would support applying Verizon’s approach to the print industry: should The New York Times, (or Multichannel News for that matter), be required by the government to license all of its unique content and technological applications to rival newspapers, Web sites or anyone with a blog?

Furthermore, Verizon customers have not missed a single game on the MSG networks. All of the professional games included in MSG’s HD networks have been made available to Verizon as part of the satellite-delivered, standard-definition MSG networks Verizon carries. No fan in the market has been denied the ability to follow every moment of their team’s progress, regardless of which company provides their video service.

Program-access rules, which were designed to foster video competition, have outlived their purpose. Today, there are at least five major television providers competing for customers in the New York market Cablevision serves, and Cablevision is the smallest company of the five. The largest of those providers are the phone companies, and the idea that Verizon needs a regulatory bailout from the FCC in order to compete with Cablevision is dubious at best.

Charles R. Schueler

Senior Vice President

Cablevision Systems

Bethpage, N.Y.

September