In response to the US media and telecommunications company Cablevision Systems Corporation announcing the news that they have filed an antitrust lawsuit today against Viacom (NYSE: VIA), in the federal court in Manhattan, for allegedly "illegally forcing Cablevision to carry and pay for 14 lesser-watched ancillary networks its customers do not want, such as Palladia, MTV Hits and VH1 Classic, in order to carry must-have networks such as Nickelodeon, MTV and Comedy Central", Viacom has released the following statement today (Tuesday 26th February 2013) on their
official blog, Blog.Viacom, regarding the antitrust lawsuit Cablevision filed against the company:
Statement from Viacom on Cablevision Antitrust Lawsuit
Viacom released the following statement today regarding the antitrust lawsuit Cablevision filed against the Company:
“At the request of distributors, Viacom and other programmers have long offered discounts to those who agree to provide additional network distribution. Many distributors take advantage of these win-win and pro-consumer arrangements. Reflecting the highly competitive cable programming business, these arrangements have been upheld by a number of federal courts and on appeal. Viacom will vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement.”
Tags: Cablevision, Cablevision antitrust lawsuit, Viacom Cablevision lawsuit
Below is Cablevision Systems Corporation's original press release, from
PRNewswire, announcing the news:
Cablevision Files Federal Antitrust Lawsuit Against Viacom For Illegally Forcing Purchase Of Programming Services
BETHPAGE, N.Y., Feb. 26, 2013 /PRNewswire/ -- Cablevision Systems Corporation (NYSE: CVC) filed an antitrust lawsuit today against Viacom (NYSE: VIA), in federal court in Manhattan, for illegally forcing Cablevision to carry and pay for 14 lesser-watched ancillary networks its customers do not want, such as Palladia, MTV Hits and VH1 Classic, in order to carry must-have networks such as Nickelodeon, MTV and Comedy Central.
Commenting on the lawsuit and Viacom, Cablevision offered the following statement:"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. 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."
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 asserts that Viacom engaged in a "per se" illegal tying arrangement in violation of the federal antitrust laws. Cablevision's antitrust lawsuit also asserts that Viacom has engaged in unlawful "block booking," which is a form of tying that conditions the sale of a package of rights on the purchaser's taking of other rights. 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 is not yet available.
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.
Viacom's eight core networks:
MTV
MTV2
Nickelodeon
VH1
Spike
TV Land
Comedy Central
BET
Viacom's 14 ancillary networks:
Centric
CMT
MTV Hits
MTV Tr3s
Nick Jr.
Nicktoons
Palladia
Teen Nick
VH1 Classic
VH1 Soul
Logo*
CMT Pure Country**
Nick 2**
MTV Jams**
*Optimum East Only
**Optimum West Only
Antitrust Legal Background
* Federal antitrust laws protect competition. By protecting competition, antitrust laws secure lower prices, higher quality, and other benefits for consumers.
* The antitrust laws prohibit tying, where a powerful firm wields its leverage from a product in one market, called the "tying" product, to compel a customer to take another product, called the "tied" product, when that customer would have preferred instead to take a product that competes with the "tied" product.
* The reason antitrust law prohibits such tie-ins is to protect competition and consumers. If powerful firms can leverage their power from one market to another, they can insulate the tied product from competition. Forcing customers such as Cablevision to take Viacom networks instead of competing networks, in turn, hurts consumers because they get less for what they pay for video services.
Cablevision officials indicated that there would be no immediate disruption in programming offerings pending the resolution of this matter.
About Cablevision Systems Corporation
Cablevision Systems Corporation is one of the nation's leading media and telecommunications companies. In addition to delivering its Optimum-branded cable, Internet, and voice offerings throughout the New York area, the Company owns and operates cable systems serving homes in four Western states. Cablevision's local media properties include News 12 Networks, MSG Varsity and Newsday Media Group. Cablevision also owns and operates Clearview Cinemas. Additional information about Cablevision is available on the Web at www.cablevision.com
SOURCE Cablevision Systems Corporation
RELATED LINKS
http://www.cablevision.com.
Also, from
C21Media:
Cablevision acts to unbundle Viacom
US cableco Cablevision has filed a lawsuit against Viacom in an attempt to drop some of the latter’s channels it claims are unpopular with customers.
Cablevision said that as part of the carriage agreement it signed with Viacom in December, it was illegally forced to carry and pay for “14 lesser-watched ancillary networks its customers do not want,” in order to carry “must-have networks” such as Nickelodeon, MTV and Comedy Central.
Viacom has “abused” the market power its popular channels provide, according to Cablevision, which names some of the “lesser-watched” channels as Palladia, MTV Hits and VH1 Classic. The cableco accused Viacom of selling its programming in a manner that is “illegal, anti-consumer and wrong.”
Viacom has dismissed the claims, saying it will “vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two-month-old agreement.”
The company said in a statement: “At the request of distributors, Viacom and other programmers have long offered discounts to those who agree to provide additional network distribution. Many distributors take advantage of these win-win and pro-consumer arrangements.
“Reflecting the highly competitive cable programming business, these arrangements have been upheld by a number of federal courts and on appeal.”
If Cablevision’s lawsuit is successful, it would set a precedent in which cable providers would be able to cherry-pick the channels they carry, rather than having to take on bundles of networks.
Cablevision’s full complaint is available here.
Nico Franks
27-02-2013
©C21Media
