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The Cable Programming Racket: Cablevision Sues Viacom for Forced Bundling of Cable Networks

Phillip Dampier February 26, 2013 Cablevision, Consumer News, Editorial & Site News, Public Policy & Gov't 7 Comments

viacomDo you ever wonder why your local cable system suddenly decided to begin carrying barely known networks like Centric, Logo, Palladia, and a dozen other channels you can’t recall ever watching even as providers perennially complain about “increased programming costs?”

The cable dial has gotten increasingly crowded with secondary cable networks that usually occupy three digit channel numbers somewhere in cable dial Siberia, unlikely to be encountered by anyone other than the most hearty channel surfer.

Welcome to the cable network racket, run by the corporate owners of popular cable networks that allegedly force cable operators to also carry (and pay for) lesser-watched networks as part of a broader carriage deal.

Today, Cablevision filed an antitrust lawsuit against Viacom in Manhattan federal court for illegally forcing the cable company to carry and pay for more than a dozen ancillary cable networks it claims customers don’t want, just so Viacom will sell access to popular cable networks including Comedy Central, MTV and Nickelodeon.

“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong,” Cablevision indicated in a prepared statement. “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 argues Viacom is hostile with cable operators who don’t want these add-on channels, coercing carriage agreements by threatening “massive financial penalties” or exclusion of popular channels altogether until operators sign up for the majority of Viacom networks.

Cablevision’s complaint asserts that Viacom is engaged in a “per se” illegal tying arrangement in violation of federal antitrust laws. Cablevision also claims Viacom has engaged in unlawful “block booking,” a form of tying  conditions on the sale of a package of rights to the purchaser’s taking of other rights.

Cablevision is seeking a number of remedies including voiding the carriage agreement Cablevision signed with Viacom just last December, a permanent injunction banning Viacom from making carriage agreements conditional on adding other networks, and financial relief in the form of damages and legal costs related to bringing the suit.

Yes

Yes

Viacom-owned networks customers actually want:

  • MTV
  • MTV2
  • Nickelodeon
  • VH1
  • Spike
  • TV Land
  • Comedy Central
  • BET
What?

What?

Viacom’s 14 extra networks you may have never heard of and may not want to pay for:

  • Centric
  • CMT
  • MTV Hits
  • MTV Tr3s
  • Nick Jr.
  • Nicktoons
  • Palladia
  • Teen Nick
  • VH1 Classic
  • VH1 Soul
  • Logo
  • CMT Pure Country
  • Nick 2
  • MTV Jams

Viacom issued a statement minutes ago claiming it would “vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two-month-old agreement.”

Viacom argues it does not force operators to carry any of its networks, but admitted it does offer financial incentives in the form of lower prices when operators agree to also carry its lesser-known networks. Viacom said that it had “long offered discounts to those who agree to provide additional network distribution.”

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Currently there are 7 comments on this Article:

  1. FrankM says:

    Let me correct that list for you…….

    Viacom-owned networks customers actually want:

    * Nickelodeon
    * Comedy Central

  2. AP says:

    IT’S ABOUT FREAKING TIME! I hoping this will create a domino effect where ALL TV Providers sue Viacom to start unbundling its channels or allow us to cancel certain channels we don’t want (ex: MTV).

  3. Scott says:

    If it was me, all I’d want would be Comedy Central and only 1 or 2 shows from that, the rest is crap.

  4. Bop says:

    I pick none….

  5. bones says:

    Entering fourth year without any cable TV or satellite. Broadcast TV, Netflix DVD service and streaming have been fine for us. However, I would reconsider cable if allowed to choose the channels and pay accordingly.







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