L.A. Judge Mulls A La Carte Lawsuit's Fate

District Court Magistrate ‘Not Persuaded’ By Content Providers’ Procedural Arguments

By Linda Haugsted -- Multichannel News, 6/16/2008 5:16:00 PM

A U.S. District Court judge in Los Angeles may let a case move forward challenging the lack of a la carte programming available to cable and satellite consumers.

Judge Christina Snyder said in court June 16 that she will mull the case further but added she is not persuaded by the motion by defendants who argued on procedural grounds that attorneys for the consumers have not made a proper claim for the court to adjudicate.

A group of consumers from California, Indiana, Virginia and New York filed the lawsuit Dec. 3, alleging that the programming deals between major content providers including defendants NBC Universal, Viacom Inc., The Walt Disney Co., and Fox Entertainment Group Inc., and distributors including Time Warner Inc., Comcast Corp., The DirecTV Group, Echostar Satellite LLC, Charter Communications Inc. and Cablevision Systems Inc. violate federal antitrust laws.

The deals create bundled programming packages that inflate programming costs for consumers who must buy channels they don't want to watch in order to get the ones they do watch, the suit asserts.
But in a motion filed by the content providers and distributors, attorneys assert that antitrust law is meant to prevent large providers from colluding in order to keep smaller companies out of a line of business.

The complaint does not demonstrate that any company has been kept out of business; in fact, attorneys arguing before Snyder noted that Discovery Networks, which is not owned by any of the huge, vertically integrated programming providers named in the suit, successfully distributes as many channels as The Walt Disney Co.

Further, independent channels benefit from bundled programming because they are placed in expanded basic tiers where they are more likely to be viewed and thrive, according to the motion on behalf of the companies.

Consumers are not injured by programming pacts by large providers which require a distributor to carry all or many of a provider's channels, the attorneys argued. If anyone has grounds for a case for damages, it's the distributors, stated Arthur Burke, an attorney for Comcast who argued before Snyder on behalf of the cable and satellite companies.

This is not the first time the defendants have tried to spike the case. A similar motion was before Snyder in March but the judge recognized that some recently decided cases created new precedents in antitrust litigation. She allowed the consumers' attorneys to amend and resubmit their case.

But Snyder said some of the arguments in the amended case raised by programmers and distributors were issues to be determined at a trial, not in a motion to dismiss. She promised a ruling on that motion soon.