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Cable Sued Over Program Bundling - Broadcasting & Cable

Cable Sued Over Program Bundling

Multimillion-Dollar Class-Action Suit Filed vs. Major Cable Programmers, Operators
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Some cable subscribers are suing to get their programming a la carte, not to mention millions of dollars from the cable industry in damages.

A multimillion-dollar class-action suit has been filed against the major cable programmers and operators for violating antitrust laws by bundling programming in expanded basic tiers.

In a suit filed by veteran antitrust attorney Maxwell Blecher on behalf of 14 cable and satellite subscribers from a variety of cities, the plaintiffs asked the court to enjoin the companies from "unlawfully bundling expanded basic-cable channels and ordering defendant cable providers and direct-broadcast satellite providers to notify their subscribers that they each can purchase 'a la carte' (separately) except for 'basic cable.'"

That basic-cable caveat covers the lifeline basic package that includes the TV stations cable must carry per government mandate.


The subscribers said they have been injured because they have been "deprived of choice, have been required to purchase product they do not want and have paid inflated prices for cable-television programming."

The suit seeks treble damages, citing the alleged antitrust violations, explaining that "contracts between the programmer defendants and the cable and direct-broadcast satellite providers constitute a combination among and between the named defendants to monopolize trade and commerce in the relevant product market," in violation of the Sherman Act, they argued. It also alleged restraint of trade.

The cable industry has been under pressure by some in Congress -- Sen. John McCain (R-Ariz.) most notably -- and from Federal Communications Commission chairman Kevin Martin to offer a la carte programming as a way to lower cable prices and give parents more control over content.

The cable industry argued that government-mandated per-channel pricing will reduce programming diversity and could actually raise rates as channels forced to fend for themselves die off or have to charge more to make the numbers work.

The suit claimed to represent all cable and satellite subscribers except the defendents or their subsidiaries and employees.

Named in the suit were NBC Universal, Viacom, Disney, Fox, Time Warner, Comcast, Cox Communications, DirecTV, EchoStar Communications, Charter Communications and Cablevision Systems.

A National Cable & Telecommunications Association spokesman was not available for comment.

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