11 FCC Red No. 6 Federal Communications Commission Record DA 96-282 
Before the 
Federal Communications Commission 
Washington, D.C. 20554 
In the Matter of 
CELLULAR VISION 
OF NEW YORK, L.P. 
v. 
SPORTSCHANNEL ASSOCIATES 
Petition for Reconsideration -
Program Access 
ORDER ON RECONSIDERATION 
CSR 4478-P 
Adopted: March 4, 1996; Released: March 12, 1996 
By the Chief. Cable Services Bureau: 
I. Introduction 
1. In this Order, we deny the Petition for Reconsider­
ation ("Petition") of SportsChannel Associates 
("SportsChannel ") filed on September 20. 1995. In its Peti­
tion, SportsChannel seeks reconsideration of a memoran­
dum opinion and order issued by the Cable Services 
Bureau (the "Bureau").1 The Order requires SportsChannel 
to sell its programming to CellularVision of New York, 
L.P. ("CellularVision"), a wireless. cellular-based 
multichannel video delivery system , o n non-discriminator~ 
terms within 45 days from the release date of the Order. 
For the reasons set forth below. we deny SportsChanners 
Petition. 
II. The Burea u's O rder 
2. On August 24, 1995. the Bureau released an order 
responding to CellularVision ·s program access complaint 
against SportsChannel alleging discrimination in the sale of 
SportsChannel New York ("SCNY") satellite cable pro­
gramming. The Bureau found that SportsChannel discrimi-
1 Cellularvision of New York, L.P. v. Sportschannel Associates, 
CSR 4478-P. Memorand um Opinion and Order. 10 FCC Red 
9273 (Cab. Serv. Bur. 1995) ("Order"). 
2 SportsChannel also fi led with the Cable Services Bureau a 
Request for Stay Pending Reconsideration ("Request for Stay") 
on September 20, 1<195. CellularVision filed an Opposition to 
the Request for Stay on September 27, 1<195. The Bureau denied 
SponsChannel's Request for Stay. See Cellu/arVision of New 
York, L.P. v. SportsChannel Associates, DA 95-2134 (Cab. Serv. 
Bur. released October 6. 1995). 
3 Communications Act § 62X(C)(2)(B). 47 U.S.C. 
§548(C)(2)(B). 
4 47 C.F.R. §76.1002(b). 
s Order, 10 FCC Red at Q276. 
6 Id. In order to avoid a decision in favor of the complainant 
in a case involving an allegation of an unreasonable refusal to 
3001 
nated against CellularVision in the sale of SCNY 
programming in violation of Section 628(c)(2)(B) of the 
Communications Act3 and Section 76.1002(b) of the Com­
mission's rules4 by unreasonably refusing to sell SCNY 
programming to CellularVision. The Bureau found that 
CellularVision had met its burden as complainant under 
the program access provisions by showing that: (i) 
SportsChannel is a vertically integrated satellite cable pro­
gramming vendor that meets the attribution standards out­
lined in the Commission 's rules; and (ii) SportsChannel 
had engaged in some form of non-price discrimination 
between CellularVision and other competing multichannel 
video programming distributors.5 The Bureau further 
found that SportsChannel did not meet its burden of estab­
lishing that it had a legitimate business reason for refusing 
to sell its SCNY programming to CellularVision.6 In par­
ticular, the Bureau found that SportsChannel's demand for 
adequate assurances that CellularVision's signal security 
system will protect SportsChannel's SCNY programming 
was reasonable. However, the Bureau also concluded that 
CellularVision had adequately addressed SportsChannel's 
concerns and that SportsChannel had no reasonable basis 
for its continued objection to CellularVision's signal secu­
r ity system. Thus, the Bureau found that SportsChannel 
did not have a legitimate business reason for refusing to 
provide SCNY programming to CellularVision. As a result, 
the Bureau ordered SportsChannel to sell its SCNY pro­
gramming to CellularVision on non-discriminatory terms 
within 45 days from the release date of the Order. 
III. SportsChannel's Petition 
3. SportsChannel, in its Petition, makes a two-pronged 
argument to support its assertion that the Bureau's Order 
must be vacated. First, SportsChannel argues that the fac­
tual predicate underlying the Bureau's Order is absent. 
That factual predicate, according to SportsChannel, is that 
CellularVision would implement the full capabilities, both 
video and audio encryption, of the Video PassPort signal 
security system manufactured by Titan Information Sys­
tems Corporation ("Titan") within a reasonable time after 
issuance of the Bureau's Order. CellularVision currently 
employs only the video encryption capability of the Video 
PassPort system .7 SportsChannel states that in preparing a 
licensing proposal for CellularVision following the release 
of the Bureau's Order, SportsChannel sought to confirm 
that CellularVision would be upgrading its signal security 
system to utilize both the audio and video encryption 
capabilities of the Video PassPo rt system within a reason­
able period of time.8 In a letter to CellularVision dated 
sell under the program access prov1s1ons, the defendant must 
establish that it ha; not engaged in discriminatory behavior 
because it has refused to sell its programming to the complain­
ant for legitimate business reasons. -See Implementation of Sec­
tions 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, Report and Order. 8 FCC Red 3359, 
3412 (1993) ("First Report and Order"). 
7 Petition at :J. 
8 Petition at 6. 
DA 96-282 Federal Communications Commission Record 11 FCC Red No. 6 
September 13, 1995, SportsChannel requested that 
CellularVision "confirm that (itJ will begin ut il izing the 
full capabilities of the Video PassPort system no later than 
January 1, 1996. "9 SportsChannel further states that 
CellularVision has taken the position that it is under no 
obligation to utilize the full capabilities of the Video Pass­
Port system within a reasonable period of time.10 
SportsChannel argues that because CellularVision will not 
provide any assurances that it will ever employ the full 
capabilities of the Video PassPort system, the factual predi­
cate underlying the Bureau's Order is absent and the Bu­
reau's Order therefore must be vacated. 
4. Second, SportsChannel argues that the Order must be 
vacated because it effectively denies SportsChannel the op­
portunity to exercise its business judgment about the ade­
quacy of CellularVision's signal security system. 
SportsChannel contends that the Bureau, in its Order, 
disregards SportsChannel's judgments regarding its signal 
security needs and substitutes the Bureau's own assessment 
of those needs.' 1 According to SportsChannel, the practical 
effect of the Bureau 's Order is to nullify a programmer's 
ability to · impose as a condition of carriage "reasonable 
requirements for creditworthiness, offering of service, and 
financial stability and standards regarding character and 
technical quality," as expressly permitted by Section 
628(c)(2)(B)(i) of the Communications Act. 12 
5. In its Opposition, CellularVision contends that the 
Bureau's Order was conditioned on CellularVision employ­
ing the signal security system currently in use bX 
CellularVision, not the full capabilities of that system. 3 
CellularVision further contends that SportsChannel's de­
mand that CellularVision implement the full capabilities of 
the Video PassPort system represents an attempt by 
SportsChannel to im~ose conditions that are contrary to 
the Bureau's Order. 4 CellularVision also argues that 
SportsChannel's claim that it has not obtained adequate 
assurances regarding signal security is unwarranted. and 
that the Bureau correctly found that SportsChan nel's con­
tinued concerns about the signal security system do not 
constitute a legitimate business reason for its refusal to 
sell. 15 
6. In its Reply, SportsChannel reiterates its claim that the 
Bureau incorrectly substituted its own judgment concern­
ing the adequacy of CellularVision's signal security system 
for SportsChannel's judgment. SportsChannel argues that 
there is no evidence that SportsChannel's signal security 
concerns were unreasonable. and that as long as there 
exists a reasonable basis for SportsChannel to be concerned 
with signal security, that issue appropriately remains a 
subject of negotiation between SportsChannel and 
Cellu larVision. 16 
9 Petition. Exhibit 2 (September 13, l<N5 letter from Andrea 
Greenberg to Gary MacGregor). 
1° CellularVision responded to SportsChanners September 13, 
l<N5 letter by stating in a letter dated September 14, 19115 that 
"(wjhen and if CellularVision decides to incorporate the full 
capabilities of the Video PassPort system ... is a business 
decision of CellularVision." Petition. Exhibit I (letter from 
John J. Prisco to Andrea Greenberg). 
11 Petition at 12. 
12 Petition at 10. 
13 Opposition at 3-.J. 
14 Opposition at 10. 
IS Id. 
•6 Reply at 7. 
3002 
IV. Discussion 
7. We find that the arguments made by SportsChannel in 
its Petition do not warrant reversal of the Bureau's Order, 
and we therefore deny the petition for reconsideration. 
Our conclusions with respect to each of the objections 
raised by SportsChannel in its Petition are set forth below. 
8. SportsChannel's claim that the Order must be vacated 
because it was granted only on the premise that audio 
encryption would be installed on CellularVision's system is 
contrary to the clear language of the Bureau's Order. 
SportsChannel is correct that both the Bureau's evidentiary 
findin~ regarding the adequacy of CellularVision's signal 
security measures and its Order requiring SportsChannel to 
sell its SCNY programming were premised on specific 
assumptions regarding the capabilities of the Video Pass­
Port s ignal security system. However, <;ontrary to 
SportsChannel's claim, the Bureau based its Order on the 
current capabilities of CellularVision's Video PassPort se­
curity system, not the potential full capabilities of the 
Video PassPort system. While the Bureau's Order acknowl­
edged the potential audio encryption capability of the Vid­
eo PassPort system, the Bureau's Order did not require the 
introduction of this technology to CellularVision's 
system .17 
9. In its Order, the Bureau conditioned its mandate that 
SportsChannel provide SCNY programming to 
CellularVision on the premise that: 
the Video Passport signal security system described by 
!Charles F.I Newby !Vice President and General 
Manager of the Broadcast Communications Division 
of Titan! in his February 14, 1995 letter to (Peter ! 
Lubell [Director of Affiliate Engineering, Rainbow! 
and in the Newby Affidavit [attached to 
CellularVision·s Reply! currently is employed by 
CellularVision on its Brighton Beach system and will 
be employed by CellularVision on systems in other 
locations within its authorized service area. 18 
The February 14. 1995 letter from Newby to Lubell and 
the Newby Affidavit cited in the Bureau·s Order contain a 
description of the attributes of the Video PassPort syste m 
currently employed by CellularVision and of the full capa­
bilities of the Video PassPort system. Both the February 14, 
1995 letter and the Newby Affidavit make clear that the 
signal security system currently employed by 
CellularVision does not employ the full capabilities of the 
Video PassPort system. •'I Thus, we reject SportsChannel's 
claim that. by incorporating a descr iption of the potential 
audio encryption capability of CellularVision's signal secu-
17 In its Order, the Bureau discussed at length the current and 
potential capabilities of the Video PassPort signal security sys· 
tern. as well as SportsChanners knowledge or these capabilities. 
Order, 10 FCC Red at 9278. 
l8 Order, 10 FCC Red at 9278. 
19 The Newby Affidavit states that Newby informed Lubell 
"that initially CellularVision would operate their system using 
synchronization pulse elimination and video inversion while 
transmitting the audio via dual subcarrier via a narrow band 
(20 GHz bandwidth) frequency modulated intermediate fre · 
quency carrier in the 28 GHz band." Reply. Exhibit A. The 
February 14, l<NS letter provides a description of the "lilnitial 
features" of the Video PassPort system employed by 
CellularVision. Complaint. Exhibit 20. 
11 FCC Red No. 6 Federal Communica~ions Commission Record DA 96-282 
rity system in its Order, the Bureau required Cellularvision 
to implement the full capabilities of the Video PassPort 
system as a condition of its Order granting Cellularvision 's 
program access complaint. 
10. SportsChannel states that CellularVision's failure to 
employ the enhanced capabilities of the Video PassPort 
system is significant because it will materially increase the 
risk of signal theft. SportsChannel provides an affidavit 
from Peter D. Lubell, Director of Affiliate Engineering and 
Signal Integrity for Rainbow Network Communications,20 
in which Lubell states that CellularVision does not employ 
an adequate means of protecting the audio portion of the 
signal because under the signal security system currently 
employed by CellularVision, the audio is transmitted in the 
clear in unscrambled form and therefore can be 
downconverted easily to be received on conventional televi­
sion receivers. Lubell states that the alleged ease with 
which the audio signal can be downconverted increases the 
incentive for pirates to crack the video portion of the 
signal.21 However, SportsChannel's claim that 
CellularVision's signal security system leaves the SCNY 
signal vulnerable to theft is specu lative. The fact that the 
audio portion of the signal may be delivered in the clear 
does not make it any easier for the would-be-pirate to 
crack the security for the video portion of the signal.22 We 
therefore are unpersuaded by SportsChannel's claim that 
the Bureau's Order leaves the SCNY signal vulnerable to 
theft on CellularVision's LMDS system. We note that our 
decision here does not preclude SportsChannel from re­
quiring enhanced signal security measures from 
CellularVision in the future if there is evidence that 
CellularVision's signal security system does not adequately 
protect the SCNY programming. 
11. We also reject SportsChannel's clajm that the Order 
must be vacated because the Bureau substituted its own 
judgment concerning the adequacy of CellularVision·s sig­
nal security system, thereby effectively denying 
SportsChannel the opportunity to exercise its own business 
judgment in this matter. While the program access provi­
sions clearly allow programmers to refuse to provide pro­
gramming for a legitimate business reason. such as 
concerns about s ignal security, the Commission cannot 
simply defer to a programmer's assessment of whether its 
concerns are reasonable.23 If that were the case. the pro­
hibition contained in the Communications Act against dis­
crimination in access to programming would be 
meaningless. The Commission clearly has the authority to 
20 Petition, Exhibit 3 ("Lubell Affidavit"). 
2I Lubell Affidavit at 2-3. 
22 The Lubell Affidavit also questions the adequacy of the 
protection of the video portion of the signal under 
CellularVision·s security system. The Affidavit states that the 
video signal "is transmitted using an out-of-date encryption 
modality. which is easily defeated." Lubell Affidavit at 4. 
SportsChannel did not raise this issue in its Answer to 
CellularVision's program access Complaint. although the 
attributes of the signal security system cu rrently utilized by 
CellularVision were known to SportsChannel at the time it 
filed its Answer and have not changed since that time. Thus. we 
decline to consider these allegations in ruling on 
SportsChanners Petition. See 47 c.F.R. § l.106(c). Moreover. as 
with SportsChannel's claims about the adequacy of the protec­
tion of the audio portion of the signal. SportsChannel's claims 
about the alleged ease with which the security for the video 
3003 
determine whether, based o n the record, a programming 
vendor's concerns are reasonable. As the Commission stat­
ed in the First Report and Order, it is the Commission's 
task to "distinguish unreasonable' refusals to sell from 
certain legitimate reasons that could prevent a contract."24 
12. In this case, the Bureau found, based on the record, 
that SportsChannel's stated concerns did not constitute a 
legitimate business reason for refusing to provide SCNY 
programming to CellularVision. The Bureau did not make 
an independent assessment of the adequacy of 
CellularVision's signal security system; rather, the Bureau 
found that the concerns raised by SportsChannel as the 
basis for its continued objection to selling SCNY program­
ming to CellularVision were in fact addressed by 
CellularVision.25 Thus, we find that SportsChannel's claim 
that the Bureau exceeded the scope of its authority in 
finding that SportsChannel's stated concerns about the ade­
quacy of CellularVision's signal security system did not 
constitute a legitimate business reason for refusing to pro­
vide SCNY programming to CellularVision is without mer­
it. 
V. Ordering Clauses 
13. Accordingly, IT IS ORDERED that the Petition for 
Reconsideration filed by SportsChannel Associates IS DE­
NIED. 
14. This action is taken by the Chief, Cable Services 
Bureau. pursuant to authority delegated by Section 0.321 of 
the Commission's rules.20 
FEDERAL COMMUNICATIONS COMMISSION 
Meredith J. Jones 
Chief, Cable Services Bureau 
?_?rtion of the signal may be cracked are speculative. 
J Communications Act §628(c)(2)(8). 47 U.S.C. §548(c)(2)(8): 
47 C.F.R. §76. lCXl2(b). 
!J First Report and Order, 8 FCC Red at 3412. 
25 In particµlar. the Bureau found. based on the evidence 
presented. that: (i) CellularVision provided SportsChannel with 
information concerning the descrambling equipment to be used, 
as requested by SportsChannel: (ii) CellularVision disclosed to 
SportsChannel that it was evaluating different systems and that 
SportsChanncl was provided with a detailed description of the 
system chosen by CellularVision and a demonstration of the 
system in operation: and (iii) SportsChannel received a detailed 
description of the capabilities of the Video PassPort system to 
protect the audio portion of signals and of the technology 
currently employed by CellularVision to protect the audio por­
tion. Order 10 FCC Red at 9277-79. 
!b 47 C.F.R. § 0.321.