AP News, September 20th, 2007
The U.S. pay-TV industry amounts to a cartel because it maintains profits by offering channels in prepackaged tiers rather than "a la carte," according to a lawsuit filed Thursday in Los Angeles.
The federal lawsuit names every major cable and satellite television system operator as well as every major cable and broadcast television network.
"The antitrust laws protect the right of choice," antitrust lawyer Maxwell M. Blecher said. "Here the customer is denied that choice."
The complex web of contractual arrangements among service providers and networks amounts to a monopoly or cartel that has "deprived consumers of choice, caused them to pay inflated prices for cable television and forced them to pay for cable channels they do not want and do not watch," Blecher wrote in the complaint filed on behalf of cable subscribers in several states.
The complaint, which alleges a conspiracy to monopolize as well as violations of federal antitrust laws, names nine plaintiffs, but Blecher wants the U.S. District Court to certify it as a class action.
Calls to the National Cable and Telecommunications Association, a trade group for the U.S. cable television industry, were not immediately returned.
Blecher contends cable and satellite television subscribers should be able to pay only for the channels they actually want to watch.
Federal Communications Commission Chairman Kevin Martin has said such a system would require federal legislation.
The cable TV industry has argued that such an a la carte system would lead to higher prices, less programming diversity and fewer channels in part because advertising revenue would fall. Such a system also would require more customer service representatives and raise the costs of billing and marketing, the industry has said.
Blecher's lawsuit seeks unspecified damages and wants the court to force cable operators to tell subscribers they can purchase channels individually.
Blecher estimated as many as 80 million people receive bundled cable or satellite television packages and could be a party to the case should it receive class-action status.
The companies named in the suit are NBC Universal Inc., Viacom Inc., The Walt Disney Co., Fox Entertainment Group Inc., Time Warner Inc., Comcast Cable Communications Inc., Cox Communications Inc., The DirecTV Group Inc., Echostar Satellite LLC, Charter Communications Inc. and Cablevision Systems Corp.
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Associated Press Writer John Dunbar in Washington contributed to this report.
