Dolan: Viacom 'Abusing Its Market Power'

CEO adds that sports surcharge is 'appropriate'

By Mike Farrell, Multichannel News -- Broadcasting & Cable, 2/28/2013 12:37:24 PM

Cablevision Systems CEO James Dolan tried to briefly explain the MSO's recent lawsuit against Viacom, on  a conference call to discuss its fourth quarter results, adding that the programming giant is "abusing its market power," by forcing retailers to accept channels they don't want.

Cablevision sued Viacom in federal court earlier this week, asking the court to halt the practice of wholesale bundling of channels.

"Viacom's practice of forcing distributors to carry more than a dozen lesser-watched networks in order to carry its must-have networks is an abuse of its market power and is a violation of federal antitrust laws," Dolan said on a conference call with analysts to discuss fourth quarter results. "Importantly this practice impairs programming competition and causes our customers' prices to rise and we believe it needs to be stopped."

Asked later on the call about the timing of the suit -- two months after it had signed a carriage agreement with Viacom -- and what if anything has changed recently in an industry that has commonly bundled channels for years to prompt the litigation, Dolan said there is a stark difference between retail and wholesale bundling.

"Retail bundling has been going on for quite some time -- [Cablevision founder and chairman] Charles Dolan was one of the first to ever do it," Dolan said on the call. "It was really designed to provide more value to the customer by giving them a lot more product at a better price. That is not what this lawsuit is about. This is about wholesalers forcing in product into retailers, taking up shelf-space and stopping the retailer from the ability to add other products and forcing the price up."

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