Cable Technology Feature Article
Cablevision Files Antitrust Lawsuit Against Viacom
By Rory Lidstone, TMCnet Contributing Writer
Cablevision Systems (News - Alert) Corporation yesterday filed an antitrust lawsuit against Viacom in a federal court in Manhattan. The suit claims that Viacom has been illegally forcing Cablevision to carry and pay for less popular networks in order to carry more frequently watched channels such as Nickelodeon, MTV and Comedy Central.
The two companies signed a long-term programming agreement in December.
In a statement, Cablevision stated that the way Viacom (News - Alert) sells its programming to cable providers is "illegal, anti-consumer, and wrong," adding that the company more or less forces consumers to pay for little-watched channels. "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 responded by stating that "these arrangements have been upheld by a number of federal courts and on appeal."
Cablevision's lawsuit claims that Viacom has abused its market power over "commercially critical networks," and the firm coerced Cablevision through threats of massive financial penalties unless Cablevision complied with Viacom's demands.
Analysts have suggested Cablevision is in for a long legal dispute with Viacom, since the two companies already have a set programming agreement, while others have called Viacom an "obvious target" for pay-TV distributors since it has been experiencing declining cable ratings recently – particularly with the Nickelodeon network.
It has also been predicted that this may set off more lawsuits from other cable and satellite operators.
Meanwhile, Cablevision has been known to fight against what it deems unfair pricing, blacking out Fox channels in 2010 for more than three million New York-area subscribers, not only for price concerns but also for having to carry programming Cablevision believed was of little interest to its customers.
The cable provider ultimately worked out a deal with Fox.
Other cable and satellite providers have taken similar action. For example, DirecTV dropped Viacom's networks in 20 million homes for a full nine days this past summer.
Edited by Braden Becker