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Cablevision files antitrust suit against Viacom

Tue, 02/26/2013 - 3:14pm
Mike Robuck

Today Cablevision filed an antitrust lawsuit against Viacom in a federal Manhattan court after alleging that Viacom illegally forced it to carry unwanted networks.

Cablevision said it was forced to carry and pay for 14 lesser-watched ancillary networks, such as Palladia, MTV Hits and VH1 Classic, in order to be allowed to carry popular networks such as MTV, Comedy Central and Nickelodeon.

“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong. Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want,” Cablevision wrote in a statement. “Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.”

Viacom did not respond to an inquiry about Cablevision’s lawsuit by deadline this morning.

Cablevision’s lawsuit is the latest salvo in the ongoing dispute between video service providers and content owners over programming cost increases.

Cablevision and Viacom previously tangled over the cable operator sending Viacom programming to its Optimum multi-screen apps, but eventually resolved their differences. http://www.cedmagazine.com/news/2011/08/cablevision,-viacom-end-suit-over-ipad-app

Cablevision’s suit contends that:

  • Viacom abused its market power over commercially critical networks, including must-have networks such as Nickelodeon, Comedy Central, and MTV, to coerce Cablevision into carrying the 14 far less popular ancillary channels.
  • Viacom coerced Cablevision by threatening to impose massive financial penalties unless Cablevision complied with Viacom’s demands.
  • Viacom’s conduct harms Cablevision and its customers, and impairs competition by making Cablevision pay for and carry networks that many subscribers do not want to watch, while other networks are excluded from distribution, preventing Cablevision from being able to differentiate its services and harming subscribers.

Cablevision’s complaint said that Viacom engaged in a “per se” illegal tying arrangement in violation of the federal antitrust laws. Cablevision’s antitrust lawsuit also asserted that Viacom has engaged in unlawful “block booking,” which it said was a form of tying that conditions the sale of a package of rights on the purchaser’s taking of other rights. According to Cablevision, Viacom’s conduct also violates the Donnelly Act in New York State Law, which parallels federal anti-trust laws.

The complaint was filed under seal and a public version wasn’t available this morning.

Cablevision is seeking a number of remedies including:

  • Declaratory relief voiding the December 2012 carriage agreement.
  • A permanent injunction barring Viacom from conditioning carriage of any or all of its core networks on Cablevision’s licensing any or all of Viacom’s ancillary networks.
  • To effectuate the permanent relief, a requirement that Viacom permit Cablevision to carry the core networks and ancillary products on terms pending negotiation of a new, lawful agreement
  • Treble damages and legal fees.

Cablevision said there would be no immediate disruption in the Viacom programming offerings pending resolution of its lawsuit.

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