In a dramatic escalation of its ongoing carriage dispute with Disney, DIRECTV has filed a complaint with the Federal Communications Commission (FCC), alleging that Disney has failed to negotiate in good faith.
The complaint, submitted last night, accuses Disney of violating the FCC’s good faith mandates by demanding DIRECTV waive any legal claims on Disney’s past, present, or future anticompetitive actions as a condition for any licensing agreement. These actions include Disney’s ongoing packaging and minimum penetration demands.
DIRECTV argues that Disney is insisting on bundling and penetration requirements that were recently found to be unlawful, anticompetitive, and “bad for consumers” by a federal district court judge in New York. The company further claims that Disney is attempting to force DIRECTV to carry a “fat bundle” of less desirable programming, while offering its own customers cheaper, “skinnier” bundles of more popular channels.
“The negotiations have stalled because Disney insists on bundling and penetration requirements that a federal district court judge in New York recently found in the context of the “Venu” joint venture to be unlawful, anticompetitive, and “bad for consumers.” Disney wants to force DIRECTV to carry a “fat bundle” including less desirable Disney programming—while itself offering cheaper, “skinnier” bundles of programming that consumers want,” the complaint states.
Furthermore, DIRECTV alleges that Disney is demanding a “clean slate” provision and a covenant not to sue, which would prevent DIRECTV from taking legal action against Disney’s anticompetitive demands, including filing good faith complaints at the FCC. The company points out that the Media Bureau recently made clear that such a demand itself constitutes bad faith.
The filing concludes by stating, “The Commission has never considered a good faith complaint in these circumstances, and DIRECTV may well wish to bring one in the future concerning Disney’s conduct.”
This latest development adds another layer of complexity to the ongoing dispute between DIRECTV and Disney, which has already resulted in a blackout of Disney-owned channels for DIRECTV customers. The FCC will now need to review the complaint and determine whether Disney has indeed violated its good faith negotiation obligations.