Court rejects Viacom's bid to throw out Cablevision bundling suit

Tools

A federal judge on Friday blocked Viacom's attempt to have a suit filed against it by Cablevision (NYSE: CVC) over its channel bundling practices dismissed.

Manhattan Judge Laura Taylor Swain ruled that Cablevision has submitted ample evidence to support its anti-trust claim, which states that Viacom is coercing it to carry 14 lower rated channels, including Palladia, MTV Hits and VH1 Classics, in order to license eight "must-have" networks including Comedy Central, MTV and Nickelodeon.

In its suit, filed in the U.S. District Court for the Southern District of New York in February 2013, Cablevision accused Viacom of using "strong-armed" tactics, forcing it to license "suite networks" in order to get the "core networks" its subscribers demand.  

Cablevision has "pleaded facts sufficient to support plausibly an inference of anticompetitive effects," Judge Swain ruled.

"Viacom's programming licensing arrangements are flexible, competitive and the result of good-faith negotiations with distributors," the company said in a statement released to Reuters Friday. "We are confident that Cablevision will fail to prove the facts required to prevail."

Cablevision, meanwhile, responded with the following statement: "We continue to believe that Viacom's tying of its popular networks to carriage of its lesser-watched ancillary networks is illegal, anti-consumer, and wrong," it said.

Cablevision asked the court for an injunction to immediately stop Viacom from employing its program bundling strategy. The court, however, ruled that its imposing such an injunction would be premature.

For more:
- read this Reuters story
- read this Bloomberg story

Related links:
Cablevision files federal antitrust lawsuit against Viacom for illegally forcing purchase of programming services
Cablevision accuses Viacom of antitrust violations
PTC applauds Cablevision antitrust suit against Viacom for network building