'Favored Nations' Fight for Online Digital Rights

In the television industry, it has long been seen as insurance for poor negotiators—the use of contractual clauses that guarantee the biggest cable operators the lowest price for TV channels. Now the clauses, which have drawn the attention of the Justice Department, are affecting where TV programs go online.

Technically known as "most favored nation" (MFN) clauses, their use in deals between cable operators and TV-channel owners has evolved over the past 25 years. Initially about economic terms, clauses are now being negotiated around digital rights, industry executives say. As a result, the clauses are in some cases limiting how and where channel owners can make their programming available online, industry executives say. Some pay-TV distributors, including the biggest, Comcast, want their video websites and apps to be the place where their video subscribers watch TV programs online. The biggest distributors use the MFN clauses to advance that, according to entertainment executives. Comcast says it hasn't asked any programmer for exclusive online program rights "since at least January 2011."