While a district court didn’t determine that Viacom...
While a district court didn’t determine that Viacom acted anticompetitively in a carriage deal with Cablevision, the rejection of the cable programmer’s motion to dismiss the case is still a mildly unwelcome development for Viacom and content companies, said a…
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Guggenheim Partners analyst. If Cablevision’s evidence can support its claims over Viacom’s evidence, “Cablevision is likely to prevail,” Paul Gallant said in a research note Monday. Cablevision alleged that Viacom engaged in illegal “tying” and forced the cable company to carry 14 networks that its customers don’t watch during a carriage deal (CD Feb 27/13 p11). The U.S. District Court for the Southern District of New York denied Viacom’s motion last week (CD June 23 p17). Cablevision has proffered subscription, demographic and other statistical information “that suffice at this pleading stage to make plausible its market definition allegations,” said Judge Laura Swain in a memorandum order. Viacom programming licensing arrangements are “flexible, competitive and the result of good-faith negotiations with distributors,” Viacom said in a statement. “Although we are disappointed that the court did not dismiss these claims at the outset, we are confident that Cablevision will fail to prove the facts required to prevail in their case.” A victory for the cable company might be a concern for content companies by raising legal uncertainly over their longtime bundling strategy, Gallant said. If the court concludes that Viacom violated antitrust law, that could feed into the nascent Telecom Act rewrite, or a narrower bill updating the 1992 Cable Act “in an unwelcome way for content companies,” he said.