August 23, 2013 1:11pm PT by Eriq Gardner
Viacom Tells Judge Not to Invalidate Carriage Agreement With Cablevision
On Friday, Viacom renewed its push to get a New York judge to reject an antitrust lawsuit brought by Cablevision.
In February, Cablevision sued Viacom over a carriage deal that was made the previous December. According to the lawsuit, Viacom has allegedly engaged in a "per se" illegal tying arrangement by bundling "must-have networks" such as Nickelodeon, Comedy Central and MTV with lesser-viewed ones including Palladia, MTV Hits and VH1 Classic.
Cablevision later amended the lawsuit in an effort to more clearly show how such "bundling" led to a foreclosure in the programming market.
Viacom says that the amended lawsuit still doesn't do the job.
"Notwithstanding the fact that Cablevision admits—indeed, touts—that it bundles the products it sells," says Viacom in a motion to dismiss, "Cablevision has nevertheless implored this Court to invalidate the licensing agreement as an invalid tying arrangement and to reform the contract to its liking so as to keep only the rates and terms it would like to have. Pushing aside the colorful rhetoric in Cablevision’s Amended Complaint, there is no basis in law or fact for Cablevision’s demand."
The dispute between Viacom and Cablevision is just one of several battles at the moment between programmers and distributors. Time Warner Cable's unfruitful negotiation with CBS thus far have forced a programming blackout and dominated the headlines lately, but the stakes of the Viacom-Cablevision fight are equally as large -- maybe even larger, possibly impacting carriage negotiations for years to come.
In its amended complaint filed last month, Cablevision said "Viacom's tying arrangement forces consumers to pay for networks they do not value as much as competing networks that Cablevision, absent the tie-in, would distribute. Absent Viacom's tying arrangement, therefore, Cablevision's subscribers would get more for their video subscription dollars. Even if the price of Cablevision's packages stayed the same, consumers would have access to programming they likely would prefer to Viacom's Suite Networks."
But Viacom reiterates a number of the objections that it raised when it attempted to throw out Cablevision's first complaint, including the fact that the cable company brought its lawsuit on the heels of signing a license renewal agreement. Viacom says that the legal principal of laches, or unreasonable delay, bars Cablevision's claims because "it was aware of the identical conduct in 2008, did nothing to challenge it, and entered into a similar agreement in 2012 without even a hint that less than two months after signing it, Cablevision would belatedly seek to challenge the alleged unlawful conduct it could have challenged at least as early as 2008."
If Cablevision is now attempting to spotlight how, absent Viacom's activities, it would be carrying such channels as Ovation, GMC, Me-TV, ASPiRE, Retirement Living TV, the Lifetime Movie Network -- all mentioned in the plaintiff's amended complaint -- Viacom is returning fire by spotlighting Cablevision's activity in Brantley v. NBC Universal, a putative class action where cable and satellite subscribers sued over bundling.
Last year, an appeals court rejected that class action because the plaintiffs had failed to allege cognizable injury to competition, but just as importantly, Cablevision was a defendant in the case.
According to the motion to dismiss, "Having successfully argued that foreclosure of competing programmers was a necessary element of any tying claim and that any allegation of foreclosure of programmers would not have 'any substance,' Cablevision cannot credibly now allege that the very same rival programmers are somehow foreclosed because of the very same alleged conduct."
In a statement in reaction to today's motion, a Cablevision spokesperson says, "Viacom’s assertions are again predictable and do not change the fact that its all-or-nothing approach to selling programming is illegal and anti-consumer."