Programmers, Distributors Muster Appeal to Latest A La Carte Ruling

Consumers Challenge Channel Bundling on Antitrust Concerns

By Linda Haugsted -- Multichannel News, 7/16/2008 2:15:00 PM

Attorneys for programming providers and distributors will appeal a U.S. District Court decision that will let consumers challenge, on antitrust grounds, the practice of selling video programming in bundles rather than on a channel-by-channel basis.

The companies have filed an appeal to ruling made July 7 in Los Angeles by Judge Christina Snyder.

Attorneys for companies including NBC Universal, Viacom, The Walt Disney Co., Fox Entertainment Group, Time Warner Inc., Comcast, Coxcom Inc., The DirecTV Group, EchoStar Satellite (Dish Network), Charter Communications and Cablevision Systems had asked the judge to dismiss the suit.

But Snyder found that there were issues raised in the suit which should be argued at trial and not handled in a motion to dismiss.

The December 2007 suit was filed on behalf of consumers in four states and aspires to be a class action on behalf of all cable and direct-broadcast satellite subscribers. The suit alleges that consumers overpay for entertainment programming because the programmers and distributors “conspire” to sell programming in bundles, forcing consumers to pay for channels they don't want.

The suit also asserts that independent programmers are foreclosed from carriage.

In their appeal to the judge, attorneys for the program suppliers contend that legal precedent suggests the judge require the plaintiffs to provide “evidentiary facts,” not just “ultimate allegations” that competitors are kept out of the market. The filing suggests some levels of burdens of proof.

The cable and DBS companies, in their appeal, assert that legal precedents preclude defining distributors as “co-conspirators.”