AT&T Sued Over RSN Pricing

Small cable op says it is having to pay too much for RSN

A tiny cable operator is taking on AT&T over the price of regional sports, raising issues of access to programming and anticompetitive conduct. The suit comes days after the Justice Department filed suit to block the Time Warner merger over just those concerns.

En-Touch, a member of the American Cable Association, which represents smaller and midsized cable/telecoms, has filed its own antitrust suit against AT&T and DirecTV in a Los Angeles District Court, alleging that its co-owned DirecTV pays above-market rates for AT&T SportsNet Southwest in Houston.

En-Touch tells the court that regional sports is must-have programming, as the FCC has pointed out, particularly for new entrants trying to compete with major league players.

Related: NBC Sports Puts Brand on Regional Sports Networks

As a result, En-Touch says it has to carry the RSN, but at an inflated price due to the pricing structure that caused the net demise under previous ownership--Comcast.

"The continuation by Defendants of the artificially high pricing structure allows Defendants to plead innocence when accused of anti-competitive pricing, proclaiming that AT&T SportsNet is expensive for all MVPDs, including Defendant MVPDs," it argues.

"Thus, the arrangement is a win-win for AT&T because it receives a revenue boost from its subsidiary, AT&T SportsNet, while both harming small MVPDs and keeping an entrance barrier for other MVPDs trying to enter the market."

En-Touch says that is restraining of trade and an attempt to monopolize the market.

The suit even adds some net neutrality rated issues for good measure. "AT&T Chairman and CEO Randall Stephenson has been vocal in his proclamation that AT&T is aggressively pursuing even more of that market, especially through the company’s 'zero-rated services' like U-verse Data Free TV and DirecTV Now," it told the court. "In this instance, “zero-rated services” are those that a telecommunications data provider like AT&T does not count against an individual subscriber’s data plan. In other words, AT&T allows individual subscribers using its cellular network to stream video via services like U-verse Data Free TV and DirecTV Now on the U-verse or DirecTV app without counting against that individual’s data plan."

En-Touch wants treble damages, attorneys fees and a jury trial.

"We believe the complaint lacks merit and we’ll vigorously defend it in court," AT&T said in response.