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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MAINE
`
`
`
`COMCAST OF MAINE/NEW HAMPSHIRE,
`INC.; A&E TELEVISION NETWORKS,
`LLC; C-SPAN; CBS CORP.; DISCOVERY,
`INC.; DISNEY ENTERPRISES, INC.; FOX
`CABLE NETWORK SERVICES, LLC;
`NBCUNIVERSAL MEDIA, LLC; NEW
`ENGLAND SPORTS NETWORK, LP; and
`VIACOM INC.,
`
`Plaintiffs,
`
` v.
`
` Case No. _____________
`
`
`DECLARATORY AND INJUNCTIVE
`RELIEF SOUGHT
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`
`
`JANET MILLS, in her official capacity as the
`Governor of Maine; AARON FREY, in his
`official capacity as the Attorney General of
`Maine; the CITY OF BATH, MAINE; the
`TOWN OF BERWICK, MAINE; the TOWN
`OF BOWDOIN, MAINE; the TOWN OF
`BOWDOINHAM, MAINE; the TOWN OF
`BRUNSWICK, MAINE; the TOWN OF
`DURHAM, MAINE; the TOWN OF ELIOT,
`MAINE; the TOWN OF FREEPORT,
`MAINE; the TOWN OF HARPSWELL,
`MAINE; the TOWN OF KITTERY, MAINE;
`the TOWN OF PHIPPSBURG, MAINE; the
`TOWN OF SOUTH BERWICK, MAINE; the
`TOWN OF TOPSHAM, MAINE; the TOWN
`OF WEST BATH, MAINE; and the TOWN
`OF WOOLWICH, MAINE;
`
`Defendants.
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`
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`COMPLAINT
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`Plaintiff Comcast of Maine/New Hampshire, Inc. (“Comcast Cable”), and plaintiffs
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`A&E Television Networks, LLC (“AETN”), National Cable Satellite Corp. (“C-SPAN”), CBS
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`Corp. (“CBS”), Discovery, Inc. (“Discovery”), Disney Enterprises, Inc. (“DEI”), Fox Cable
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`Network Services, LLC (“Fox”), NBCUniversal Media, LLC (“NBCUniversal”), New England
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`Sports Network, LP (“NESN”), and Viacom Inc. (“Viacom”) (collectively, “Plaintiff
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`Programmers,” and together with Comcast Cable, “Plaintiffs”), bring this suit for declaratory
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`judgment and injunctive relief against Janet Mills, in her official capacity as the Governor of
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`Maine; Aaron Frey, in his official capacity as the Attorney General of Maine; the City of Bath,
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`Maine; the Town of Berwick, Maine; the Town of Bowdoin, Maine; the Town of Bowdoinham,
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`Maine; the Town of Brunswick, Maine; the Town of Durham, Maine; the Town of Eliot, Maine;
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`the Town of Freeport, Maine; the Town of Harpswell, Maine; the Town of Kittery, Maine; the
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`Town of Phippsburg, Maine; the Town of South Berwick, Maine; the Town of Topsham, Maine;
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`the Town of West Bath, Maine; and the Town of Woolwich, Maine (collectively, “Defendants”),
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`stating as follows:
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`NATURE OF THE CASE
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`1.
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`This case arises from the State of Maine’s attempt to regulate the provision of
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`cable television in a manner that is squarely preempted by federal law and foreclosed by the First
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`Amendment. Specifically, Maine’s H.P. 606 – L.D. 832, “An Act to Expand Options for
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`Consumers of Cable Television in Purchasing Individual Channels and Programs,” mandates
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`that, “[n]otwithstanding any provision in a franchise, a cable system operator shall offer
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`subscribers the option of purchasing access to cable channels, or programs on cable channels,
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`individually.” 129 Pub. L. Ch. 308 (2019) (“L.D. 832”), available at
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`http://legislature.maine.gov/legis/bills/bills_129th/chapters/PUBLIC308.asp.
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`2.
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`An array of federal statutory provisions precludes Maine from dictating how cable
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`programming is presented to consumers. Those provisions reflect Congress’s considered
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`judgment that consumers’ interests will be best served if content developers, programming
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`networks, and cable operators (and other distributors) enter into market-based agreements to
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`determine the optimal packaging of video programming, without micromanagement by 50
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`different states and myriad local governments. Maine’s effort to foist an “à la carte” regime on
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`these industry participants not only is unlawful, but would end up causing the very harms it seeks
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`to avoid—namely, higher costs and reduced programming choice. Indeed, as discussed further
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`below, the Federal Communications Commission (“FCC”) and Government Accountability
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`Office (“GAO”) have studied the implications of an à la carte mandate in depth and concluded
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`that forced unbundling of all cable tiers and packages would diminish carriage opportunities for
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`many programmers and ultimately drive many out of business, thereby curtailing choice and
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`diminishing diversity, while also increasing programming costs for consumers and forcing many
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`of them to lease new equipment.
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`3.
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`L.D. 832 is expressly preempted by several provisions of the Communications
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`Act of 1934, as amended (the “Communications Act” or “Act”). First, L.D. 832 runs afoul of
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`Section 624(f) of the Act, which prohibits state and local authorities from regulating the
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`“provision or content of cable services, except as expressly provided in” Title VI of the
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`Communications Act. 47 U.S.C. § 544(f)(1); see Lafortune v. City of Biddeford, 222 F.R.D. 218
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`(D. Me. 2004) (invalidating city ordinance regulating content of cable services in a manner that
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`violated Section 624(f)), aff’d 142 F. App’x 471 (1st Cir. 2005). Because nothing in Title VI
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`provides for or authorizes the à la carte mandates imposed by L.D. 832, Maine is barred from
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`imposing such requirements. For similar reasons, L.D. 832 is expressly preempted by
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`Sections 624(a) and (b) of the Act, which prohibit municipalities functioning as local franchising
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`authorities (“LFAs”)—the entities principally charged with enforcing L.D. 832—from regulating
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`“the services, facilities, and equipment provided by a cable operator except to the extent
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`consistent with [Title VI],” or from “establish[ing] requirements for video programming,” except
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`in very limited respects not applicable here. 47 U.S.C. §§ 544(a), (b)(1).
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`4.
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`L.D. 832 is also preempted by Section 636(c), which expressly “preempt[s] and
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`supersede[s]” any state law that “is inconsistent with [the Communications Act].” Id. § 556(c).
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`L.D. 832 is exactly that, because it conflicts with federal law and policy objectives established by
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`the Communications Act and FCC rules adopted pursuant to it. For example, the
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`Communications Act and FCC rules require that cable operators provide all subscribers with
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`certain broadcast stations as part of a mandatory “basic tier” of service. Id. §§ 534,
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`543(b)(7)(A). Yet L.D. 832, by its terms, mandates the offering of such individual channels (and
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`even individual programs on channels) without any need to purchase the federally mandated
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`basic tier, making it impossible to comply with L.D. 832 without violating federal law. More
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`broadly, L.D. 832 effectively dismantles tiers of cable service that Congress and the FCC have
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`repeatedly recognized as valid and, in certain cases, required. See, e.g., 47 C.F.R. § 76.920
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`(“Every subscriber of a cable system must subscribe to the basic tier in order to subscribe to any
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`other tier of video programming or to purchase any other video programming.”); id. § 76.921(a)
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`(“A cable operator may . . . require the subscription to one or more tiers of cable programming
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`services as a condition of access to one or more tiers of cable programming services.”). Under
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`the Supremacy Clause of the U.S. Constitution, U.S. Const. art. VI, cl. 2, and Section 636 of the
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`Act, state measures that contravene validly adopted federal laws and policy determinations are
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`preempted and have no force or effect.
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`5.
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`More fundamentally, L.D. 832 violates the First Amendment. As the federal
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`government recognized in declining to impose an à la carte mandate, tiers and bundling are not
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`just a product of unilateral decision-making by cable operators or an exercise of purely
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`contractual rights. Tiers and bundling reflect the exercise of First Amendment rights—both by
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`the programmers who decide how to license their programming to cable operators, and by the
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`cable operators who decide how to provide that programming to the public. The federal statutory
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`and regulatory provisions, which give cable operators and programmers flexibility to package
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`and sell programming in whatever manner they deem most appropriate (apart from the
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`mandatory carriage requirements set forth in the Act), thus are, at their core, grounded in the
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`First Amendment. By taking away that flexibility, L.D. 832 imposes both content- and speaker-
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`based restrictions, infringing the rights of programmers and cable operators. And, to make
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`matters worse, the statute uniquely burdens cable operators (exempting all other video
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`distributors). Restrictions of this type must satisfy strict scrutiny, a standard that L.D. 832
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`cannot possibly meet. Indeed, this unsupported one-sentence state mandate could not satisfy
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`even intermediate scrutiny, which would require Maine to show that L.D. 832 furthers an
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`important or substantial governmental interest and imposes restrictions on First Amendment
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`freedoms that are no greater than is essential to further that interest. See Turner Broad. Sys., Inc.
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`v. FCC, 512 U.S. 622, 662 (1994) (“Turner I”). L.D. 832 does not even begin to meet that test.
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`6.
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`As a preliminary matter, the thin legislative record falls short of satisfying the
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`State’s burden of showing that L.D. 832 materially advances any purported interests in
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`expanding programming options and saving consumers money. Leaving aside that the statute
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`was passed with almost no regard for this foundational question, the State could not have met
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`this burden even had it tried to do so: Today, consumers have an unprecedented array of
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`competitive options for accessing video, including on an à la carte basis. L.D. 832’s à la carte
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`mandate would threaten that consumer choice. By curtailing the exercise of First Amendment
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`rights as well as exclusive rights under the Copyright Act to license the provision of
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`programming in ways that will best increase its viewership, L.D. 832 would imperil the survival
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`of many programming networks, particularly those serving niche audiences, thereby detracting
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`from programming diversity and quality. After all, if niche networks lack sufficient subscriber
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`penetration and viewership that they often attain through carriage on program tiers, it is unlikely
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`that they will be able to continue operating. L.D. 832 also would require substantial
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`infrastructure modifications as well as changes to customer ordering, subscription management,
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`and billing systems, with costs ultimately passed through to subscribers. It also would require
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`some subscribers to lease or purchase additional technology from cable operators (or require the
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`replacement of existing technology) to obtain à la carte programming, thereby undermining any
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`purported cost savings from à la carte cable offerings. What is more, L.D. 832 would cause
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`consumer prices to increase because the loss of advertising revenues programmers typically
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`obtain via tiered carriage would instead need to be recovered by charging higher license fees to
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`cable operators, costs that would in turn be passed along to subscribers. In short, far from
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`promoting increased choice or saving money for consumers, as L.D 832’s sponsors posited, such
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`mandates likely would have the opposite effects, as the FCC and GAO (among other experts)
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`have documented.
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`7.
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`Apart from the lack of any evidence that L.D. 832 materially furthers a substantial
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`state interest, the statute is also insufficiently tailored to survive any level of heightened scrutiny.
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`Not only does it impose an unnecessarily sweeping mandate on those that it does regulate, but
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`L.D. 832 represents an underinclusive means of ensuring the offering of video programming on
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`an à la carte basis, as the statute is focused solely on cable operators—and does not impose any
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`similar requirement on any of cable’s traditional or Internet-based competitors.
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`8.
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`Plaintiffs would suffer irreparable harm if L.D. 832 were permitted to take effect.
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`Courts have long recognized that imposing unconstitutional obligations and restrictions on
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`speech constitutes irreparable injury in and of itself. Here, moreover, the prerogatives of cable
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`operators and programmers to offer programming as they see fit are further protected by federal
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`law through the Communications Act (and the Copyright Act). The loss of the flexibility that
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`federal law preserves is itself irreparable injury. In addition, the practical consequences of L.D.
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`832’s actual or threatened enforcement would cause Plaintiffs to incur an immeasurable loss of
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`consumer and commercial goodwill and sustain significant monetary losses that likely would
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`prove unrecoverable—e.g., due to statutory immunity protections afforded to municipalities. See
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`47 U.S.C. § 555a(a). For example, to begin offering all channels and programs on an à la carte
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`basis, Plaintiff Comcast Cable and other cable operators would be required to undertake
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`extensive modifications to their network infrastructure; ordering, subscription management, and
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`billing systems; customer care operations; and consumer equipment. Due to its complexity, such
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`a transition would impose substantial costs, would harm cable operators’ relationships with their
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`subscribers, and would divert resources from other programming, service, and technology
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`enhancements they might otherwise offer. Moreover, by purporting to abrogate the terms of
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`existing agreements between programming networks and cable operators—which typically
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`require distribution of channels in their entirety and as part of tiers—L.D. 832 inevitably would
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`give rise to contractual disputes, thereby exposing Plaintiffs to the risk of costly litigation and
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`potential service disruptions.
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`9.
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`The à la carte mandate also would irreparably harm Plaintiff Programmers by
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`substantially disrupting their existing business model, which is generally oriented around
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`distribution of programming channels on tiers of service that cable operators offer their
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`subscribers. In addition, L.D. 832 would put many programmers at odds with third-party
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`copyright owners that typically supply much of their programming, to the extent the relevant
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`agreements are predicated on (as is expressly permitted by the Copyright Act, see 17 U.S.C.
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`§ 106) the distribution of content as part of a tier (e.g., as is often the case for sports
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`programming of the type distributed by Plaintiff NESN). L.D. 832 also would undermine
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`programmers’ carriage agreements, which typically require cable operators to carry networks as
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`part of a tier. Programmers often negotiate license fees with cable operators based on tiered
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`carriage, and eliminating such carriage would force programmers to charge higher license fees to
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`cable operators, which ultimately would be passed on to subscribers. Similarly, by restricting
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`viewership, L.D. 832 would significantly diminish Plaintiff Programmers’ advertising revenues,
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`and those losses too would require the imposition of higher license fees (and, in turn, subscriber
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`charges). In fact, such losses could drive some networks off cable systems entirely. L.D. 832
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`thus would harm the very consumer choice and content diversity that L.D. 832 is ostensibly
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`intended to foster.
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`10.
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`Because such harms to Comcast Cable and Plaintiff Programmers will otherwise
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`prove irremediable, injunctive relief is warranted.
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`JURISDICTION AND VENUE
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`11.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because
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`Plaintiffs’ claims arise under the laws of the United States, including the Communications Act of
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`1934, as amended, 47 U.S.C. §§ 151 et seq., and 42 U.S.C. § 1983, as well as the Supremacy
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`Clause of, and First Amendment to, the U.S. Constitution. This Court has equitable jurisdiction
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`to enjoin unconstitutional action. Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378,
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`1384 (2015).
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`12.
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`Because an actual controversy within the Court’s jurisdiction exists, this Court
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`may grant declaratory and injunctive relief pursuant to the Declaratory Judgment Act, 28 U.S.C.
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`§§ 2201-2202.
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`13.
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`Venue is proper in the District of Maine, pursuant to 28 U.S.C. § 1391(b),
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`because the events and omissions giving rise to Plaintiffs’ claims occurred in Maine. The statute
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`was passed by the Maine Legislature, and it will be enforced by Defendants and, if not enjoined,
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`cause injury to Plaintiffs in Maine.
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`PARTIES
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`14.
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`Plaintiff Comcast Cable provides cable television services to households,
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`businesses, and governmental entities in Maine.
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`15.
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`Plaintiff AETN is a provider of a wide array of video programming that is
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`distributed via cable operators and satellite providers in Maine, as well as by online video
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`providers. AETN’s programming networks include, among others, A&E, HISTORY, Lifetime,
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`LMN (Lifetime Movies), and FYI.
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`16.
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`Plaintiff C-SPAN is a provider of public policy-focused video programming,
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`including live gavel-to-gavel coverage of the U.S. House of Representatives and the U.S. Senate.
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`Its programming is distributed via cable operators and satellite providers in Maine, as well as by
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`online video providers.
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`17.
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`Certain subsidiaries of Plaintiff CBS provide a wide array of video programming
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`that is distributed via cable operators and satellite providers in Maine, as well as by online video
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`providers. That programming includes the CBS Television Network, The CW, CBS Sports
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`Network, Pop, and the Smithsonian Channel.
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`18.
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`Plaintiff Discovery, through certain of its subsidiaries, is a provider of a wide
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`array of video programming that is distributed via cable operators and satellite providers in
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`Maine, as well as by online video providers. Discovery’s video programming includes
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`Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel Channel,
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`Motortrend, Animal Planet, Science Channel, DIY Network, and Cooking Channel.
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`19.
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`Certain affiliates of Plaintiff DEI provide a wide array of video programming that
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`is distributed via cable operators and satellite providers in Maine, as well as by online video
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`providers. That programming includes the ABC Television Network, ESPN, Disney Channel,
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`Freeform, Disney XD, Disney Junior, FX, and the National Geographic Network.
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`20.
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`Certain affiliates of Plaintiff Fox provide a wide array of video programming that
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`is distributed via cable operators and satellite providers in Maine, as well as by online video
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`providers. That programming includes FOX, Fox News Channel, Fox Business Network, Fox
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`Sports 1, Fox Sports 2, Big Ten Network, and Fox Deportes.
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`21.
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`Plaintiff NBCUniversal, a subsidiary of Comcast, is a provider, both directly and
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`through certain subsidiaries, of a wide array of video programming that is distributed via cable
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`operators and satellite providers in Maine, as well as by online video providers. That
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`programming includes the NBC Television Network, CNBC, MSNBC, USA Network, Bravo, E!
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`Entertainment, Syfy, Universal Kids, and Oxygen.
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`22.
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`Plaintiff NESN is a provider of Boston sports-related video programming,
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`including telecasts of live Boston Red Sox and Boston Bruins games, which is distributed via
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`cable operators, satellite providers, and other video distributors in Maine and the other New
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`England States, as well as by online video providers. For almost two decades, NESN has entered
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`into affiliation agreements with various cable operators that cover multiple states, providing for
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`the distribution of its content as part of various cable package offerings, but not on a standalone
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`basis. During the legislative debate on L.D. 832, NESN was specifically targeted as a network
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`that should be forced to have its programming offered on an à la carte basis to Maine residents.
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`See Testimony of Rep. J. Evangelos at 2 (Mar. 5, 2019 Hearing), available at
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`http://www.mainelegislature.org/legis/bills/getTestimonyDoc.asp?id=96832.
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`23.
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`Plaintiff Viacom is a provider of a wide array of video programming that is
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`distributed via cable operators and satellite providers in Maine, as well as by online video
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`providers. Viacom’s programming includes Nickelodeon, MTV, BET, Comedy Central,
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`Paramount Network, VH1, TV Land, CMT, and Logo.
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`24.
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`Defendant Janet Mills is the Governor of Maine. The Maine Constitution
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`provides that the “supreme executive power of this State shall be vested in a Governor,” and that
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`the “Governor shall take care that the laws be faithfully executed.” Me. Const. art. V, §§ 1, 12.
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`This executive power includes enforcement of L.D. 832. Defendant Mills is sued in her official
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`capacity only.
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`25.
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`Defendant Aaron Frey is the Attorney General of Maine. The Attorney General
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`represents the state in civil actions to recover money for the state, and has authority to take “civil
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`or criminal action . . . under common law or statute, including an action . . . to obtain injunctive
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`relief or a combination of injunctive relief and other remedies available under common law or
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`statute.” 5 M.R.S. §§ 192, 194-J(2). Additionally, guidance promulgated by the Attorney
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`General states that “the legislature has enacted specific rights and protections for users of cable
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`television systems . . . . The Attorney General’s Office is authorized to receive consumer
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`complaints concerning matters other than channel selection and rates.” Maine Attorney General,
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`Consumer Law Guide § 29.24 (2012) (emphasis removed), available at
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`https://www.maine.gov/ag/consumer/law_guide_article.shtml?id=27950. Defendant Frey is sued
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`in his official capacity only.
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`26.
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`Defendant the City of Bath is a municipality located in the State of Maine.
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`“Pursuant to 30-A M.R.S.A. § 3008 municipalities may enact ordinances governing the
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`franchising and regulation of cable television systems.” Id. § 29.24. Maine law confers on
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`municipalities the right to seek “injunctive relief in addition to any other remedies available by
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`law to protect any rights conferred upon the municipality by [section 3008] or any ordinances
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`enacted under [section 3008] or section 3010,” 30-A M.R.S. § 3008(3)(E). L.D. 832 will be
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`codified in section 3008 of title 30-A of the Maine Revised Statutes, thereby giving Bath and the
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`other municipal defendants the authority to enforce its requirements. Comcast Cable provides
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`cable television services in Bath, and Plaintiff Programmers develop and license programming
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`that is distributed by cable operators in Bath.
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`27.
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` Defendant the Town of Berwick is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Berwick the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Berwick, and Plaintiff Programmers develop and license programming that is distributed by
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`cable operators in Berwick.
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`28.
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`Defendant the Town of Bowdoin is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Bowdoin the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Bowdoin, and Plaintiff Programmers develop and license programming that is distributed by
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`cable operators in Bowdoin.
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`29.
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`Defendant the Town of Bowdoinham is a municipality located in the State of
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`Maine. As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants
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`Bowdoinham the authority to enforce its requirements. Comcast Cable provides cable television
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`services in Bowdoinham, and Plaintiff Programmers develop and license programming that is
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`distributed by cable operators in Bowdoinham.
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`30.
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`Defendant the Town of Brunswick is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Brunswick the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Brunswick, and Plaintiff Programmers develop and license programming that is distributed by
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`cable operators in Brunswick.
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`31.
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`Defendant the Town of Durham is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Durham the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Durham, and Plaintiff Programmers develop and license programming that is distributed by
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`cable operators in Durham.
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`32.
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`Defendant the Town of Eliot is a municipality located in the State of Maine. As
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`detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Eliot the
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`authority to enforce its requirements. Comcast Cable provides cable television services in Eliot,
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`and Plaintiff Programmers develop and license programming that is distributed by cable
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`operators in Eliot.
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`33.
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`Defendant the Town of Freeport is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Freeport the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Freeport, and Plaintiff Programmers develop and license programming that is distributed by
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`cable operators in Freeport.
`
`34.
`
`Defendant the Town of Harpswell is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Harpswell the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Harpswell, and Plaintiff Programmers develop and license programming that is distributed by
`
`cable operators in Harpswell.
`
`35.
`
`Defendant the Town of Kittery is a municipality located in the State of Maine. As
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`detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Kittery the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
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`Kittery, and Plaintiff Programmers develop and license programming that is distributed by cable
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`operators in Kittery.
`
`36.
`
`Defendant the Town of Phippsburg is a municipality located in the State of
`
`Maine. As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants
`
`Phippsburg the authority to enforce its requirements. Comcast Cable provides cable television
`
`{R2145049.1 71122-078262 }
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`Case 1:19-cv-00410-NT Document 1 Filed 09/06/19 Page 15 of 53 PageID #: 25
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`services in Phippsburg, and Plaintiff Programmers develop and license programming that is
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`distributed by cable operators in Phippsburg.
`
`37.
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`Defendant the Town of South Berwick is a municipality located in the State of
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`Maine. As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants South
`
`Berwick the authority to enforce its requirements. Comcast Cable provides cable television
`
`services in South Berwick, and Plaintiff Programmers develop and license programming that is
`
`distributed by cable operators in South Berwick.
`
`38.
`
`Defendant the Town of Topsham is a municipality located in the State of Maine.
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`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Topsham the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
`
`Topsham, and Plaintiff Programmers develop and license programming that is distributed by
`
`cable operators in Topsham.
`
`39.
`
`Defendant the Town of West Bath is a municipality located in the State of Maine.
`
`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants West Bath the
`
`authority to enforce its requirements. Comcast Cable provides cable television services in West
`
`Bath, and Plaintiff Programmers develop and license programming that is distributed by cable
`
`operators in West Bath.
`
`40.
`
`Defendant the Town of Woolwich is a municipality located in the State of Maine.
`
`As detailed above, section 3008 of title 30-A of the Maine Revised Statutes grants Woolwich the
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`authority to enforce its requirements. Comcast Cable provides cable television services in
`
`Woolwich, and Plaintiff Programmers develop and license programming that is distributed by
`
`cable operators in Woolwich.
`
`{R2145049.1 71122-078262 }
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`Case 1:19-cv-00410-NT Document 1 Filed 09/06/19 Page 16 of 53 PageID #: 26
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`FACTUAL AND LEGAL BACKGROUND
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`Cable Operators & Programmers
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`41.
`
`Comcast Cable is a provider of cable television services in Maine. In Maine, as
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`elsewhere, cable operators distribute 24/7 channels of video content provided by companies such
`
`as Plaintiff Programmers (e.g., A&E, C-SPAN, CBS, Discovery Channel, ABC, FOX, NBC,
`
`NESN, and Nickelodeon), as well as individual programming assets. Cable operators package
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`such channels (also called “networks”) into “tiers” designed by the cable operator, and also offer
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`certain channels and individual programs on an à la carte basis that cable subscribers may
`
`purchase separately. A cable operator’s distribution of a programmer’s content is governed by a
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`contract—known as an “affiliation agreement” or, in the case of many broadcast station
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`programmers, a “retransmission consent agreement”—between the two parties. The carriage of
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`some broadcast stations is instead governed by the Communications Act’s “must-carry”
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`provisions and the FCC’s implementing rules, which require distribution of their content as a
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`matter of law without any contract between the broadcast stations and cable operators.
`
`42.
`
`Although affiliation agreements’ terms vary, they typically grant a cable operator
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`rights to distribute a programmer’s networks as part of a certain “tier” of channels. See U.S.
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`Gen. Accounting Office, GAO-04-8, Telecommunications: Issues Related to Competition and
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`Subscriber Rates in the Cable Television Industry 33-34 (2003) (“GAO Report”) (explaining,
`
`based on GAO’s review of contracts and other research, that programming agreements generally
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`specify tiering requirements). Such terms are grounded in the exercise of First Amendment and
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`exclusive copyright rights to decide how to license creative works, and many programmers
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`negotiate for them because they (and the content creators whose works they are licensed to
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`provide) want their content to be available to wide audiences in order to attract dedicated and
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`Case 1:19-cv-00410-NT Document 1 Filed 09/06/19 Page 17 of 53 PageID #: 27
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`even casual viewers. See id. at 34. A network’s placement on a tier enables greater viewership
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`of the network, which generally increases the advertising revenue that a programmer may obtain
`
`and gives the programmer the ability to charge a lower license fee to cable operators, thereby
`
`lowering subscription prices. Id. As a result, affiliation agreements are negotiated to contain
`
`various “carriage,” “packaging,” and “penetration” provisions—that is, how a programmer’s
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`networks may be distributed to a cable operator’s subscribers. For example, an affiliation
`
`agreement’s terms may prov