Viacom Looks to Catch Cablevision Two-Faced on State of TV Competition

A federal judge is directed to what Cablevision has been telling the FCC.
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As Viacom continues to defend itself from allegations of violating antitrust law by tying "must-have" networks with ratings-challenged ones, the programmer is looking to stick it to its legal nemesis.

Last year, a federal judge gave Cablevision the green light to pursue Viacom over the bundling of its networks in carriage negotiations. Since then, Viacom demanded its contract with Cablevision be rescinded, meaning the cable company could lose rights to such Viacom-owned channels as Nickelodeon, Comedy Central and MTV (plus, lesser ones like Palladia, MTV Hits and VH1 Classic).

Now, Viacom has been kicking up a storm in the discovery phase of the litigation. On Friday, the company told a judge that it wants documents related to Game Show Network v. Cablevision.

That's a matter now awaiting determination by the Federal Communications Commission.

There, GSN has claimed that Cablevision committed carriage discrimination by removing it from a more widely distributed tier into a premium sports tier. Cablevision allegedly made this move to benefit the Cablevision-affiliated WE tv and Wedding Central networks — channels of "female-oriented" programming that GSN says is most analogous to the reality and competition-based programming that it itself serves to audiences.

In July, the FCC conducted a trial. Both sides are awaiting a decision.

In the meantime, Viacom believes that Cablevision's defense in the GSN matter could bolster its own defense that there has been no marketplace foreclosure when "tied" Viacom networks like Palladia, MTV Hits and VH1 Classic push non-Viacom networks into lesser viewed tiers.

In a letter to the judge (see here), Viacom's lawyer writes that in GSN case, "when GSN asserted against Cablevision the same argument that Cablevision now asserts against Viacom, Cablevision noted that it and other cable operators are facing 'significantly increased competition' from, among other things, other cable companies, satellite TV companies, Verizon FIOS and 'a variety of new internet services that deliver television shows and movies to viewers without the need for a cable or satellite subscription.' Cablevision went on to argue that any subscribers who were interested in viewing GSN could simply sign up for the lower tier or switch to any of the many competitors that carried GSN more broadly."

Viacom believes this assessment of competition in the industry is relevant and so it wants depositions and other confidential documents produced from the GSN case to further build this line of defense. The letter previews what Viacom will be arguing at trial.

"Here, among other defenses, Viacom will argue (much as Cablevision has in the GSN matter) that the increase in intense competition for video programming, particularly given the availability of videoprogramming in non-traditional formats like online streaming and mobile applications, defeats any claim of foreclosure," states the Viacom letter.

Viacom's latest discovery push comes after a couple months of quarreling over whether it should have access to negotiations and contracts between Cablevision and other broadcasters. That separate document request prompted objections from third-parties including A&E and NBCUniversal who warned of serious harm if their trade secrets were revealed. On Friday, the judge held a hearing on this without immediately ruling.

Now, as the FCC takes a closer look at the practice of channel bundling in retransmission consent negotiations, Viacom returns the favor by examining an FCC proceeding and the state of video competition.

A Cablevision spokesperson tells THR, "Viacom’s tying of its popular networks to carriage of its lesser-watched ancillary networks is illegal, anti-consumer and wrong. The idea that this case and the unrelated GSN case have anything to do with each other is a preposterous concoction and wishful thinking by Viacom’s lawyers."