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10/20/2009

Court Tosses Bundling Suit Against MSOs, DBS

By: Mike Farrell, Multichannel News

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 www.blechercollins.com%2FAttorneys%2FMaxwell-M-Blecher.shtml">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.

Source: http://www.multichannel.com/article/358420-Judge_Approves_Charter_Reorganization_Plan.php?rssid=20061