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Cable Operators

Court Tosses Bundling Suit Against MSOs, DBS

10/20/2009 3:01 PM Eastern

After two years of winding through the federal courts, an
anti-trust lawsuit in California claiming cable and satellite TV operators and programmers harmed consumers by
not offering channels a la carte has been dismissed, though the attorney for the
plaintiffs vows an appeal.

"That was the plan from the beginning," said plaintiffs'
attorney Maxwell Blecher, of Los Angeles. "Whichever side lost was going to appeal. That's what
we plan to do and I'm pretty comfortable we're going to get it overturned."

That could take some time. Blecher said that the California federal
courts are clogged with immigration cases, so an appeal could take anywhere
between 18 months to 2 years.

The clerk's office for the U.S. District Court for the
Central District of California confirmed that the case, Brantley v. NBC
Universal, had been dismissed by U.S. District Court Judge Christina Snyder on
Oct. 15.

The gist of the case is that the plaintiffs claim that cable
operators and networks harm consumers by bundling programming into packages and
tiers rather than making them available a la carte.

According to a report in Bloomberg
News
, Snyder denied a request by plaintiffs lawyers that they don't have to
show competitors have been excluded to proceed with their antitrust claims.

"Plaintiffs do not seek to allege that any actual or
potential competitors have been foreclosed from the tied product market,"
Snyder wrote in her ruling, according to Bloomberg. "It is not sufficient to
allege that a desirable version of a product is excluded from the market."

Blecher said in an interview that will be the basis of his
appeal.

"With all due respect I think she's [Snyder] wrong," Blecher
said. "I don't think the law requires foreclosure in every circumstance."

The suit was originally filed in December 2007 and was prolonged by a ruling last June. It named programmers NBC Universal, Viacom, The Walt Disney Co., Fox
Entertainment Group and Time Warner Inc., and distributors including Comcast, Charter, Cablevision Systems,
DirecTV and Dish Network.

The suit claims contracts between programmers
and distributors harm consumers because they force subscribers to buy programming
that they don't want or watch. Bundling programming causes consumers to overpay
for their video options, according to the suit.

Buttressing their argument in court papers was information from an FCC report that indicated consumers may overpay for cable by as much as $100 million annually by paying for undesirable channels. The plaintiffs sought  four years worth of overcharges, $400 million, as damages. 

 

 

 

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