Major Cable and Satellite Operators Face Class Antitrust Suit

An antitrust lawsuit filed Thursday accuses leading programming, cable and satellite TV firms of colluding to only offer prepackaged tiers of bundled programs and refusing to sell programming a la carte.

The lawsuit, filed in U.S. District Court for the Central District of California’s Western Division, seeks damages and an end to the bundling practices.

The plaintiffs are named individual subscribers of Comcast, Time Warner Cable, Cox, EchoStar and DirecTV, seeking to establish a class consisting of “expanded-basic” customers of those companies and Charter and Cablevision Systems over the past four years.

In the complaint, filed by Maxwell M. Blecher of Blecher & Collins in Los Angeles on Sept. 20, they’re suing those multichannel video providers and NBC Universal, Time Warner Inc., Viacom, Walt Disney Co. and Fox Entertainment, under the Sherman Antitrust Act.

Each of the programmer defendants owns TV programs and interests in one or more TV channels. The cable and satellite providers supply a “basic cable” bundled service that’s required to be purchased before a subscriber can access other tiers of service, the lawsuit says.

The complaint cites a Nielsen Media Research report that states the average cable subscriber pays for 85 channels he or she doesn’t watch in order to get the 16 channels he or she does watch. It also cites a poll, by the Associated Press-Ipsos, that found 78% of respondents would rather buy only the channels they choose themselves. And it cites a Federal Communications Commission estimate that consumers are charged about $100 million a year for channels they wouldn’t buy under an a la carte regime.

National Cable & Telecommunications Association senior VP of communications and public affairs Rob Stoddard said the organization, which represents cable operators and programmers, doesn’t comment on litigation that names companies within and outside NCTA. "However, our view of a la carte hasn't changed," he said. "Many government and private studies have found that mandated a la carte would lessen programming choice, decrease diversity in programming, and raise prices for most cable customers."

Parents Television Council endorsed the lawsuit. "On behalf of our 1.2 million members, we applaud the commencement of legal action which, we hope, will lead to the ability for cable subscribers to pick and choose – and pay for – only the cable networks they want," PTC president Tim Winter said in a statement.