What the heck is going on!
Word is spreading that the Justice Department filed suit today against AT&T accusing their DirectTV unit of an concerted, orchestrated and collusionary campaign to illegally block carriage of the Los Angeles Dodgers' TV channel -- SportsNet LA.
Per Meg James of the LA Times:
In a lawsuit filed Wednesday in federal court in Los Angeles, the Justice Department accused DirecTV of being a ringleader in an effort to make sure that three other pay-TV companies — Cox Communications, Charter Communications and AT&T (which was then separate from DirecTV) -- would refuse to carry SportsNet LA, the Dodgers-owned TV channel.This is like some sort of corporate conspiracy, and only adds fuel to the belief in most Americans that cable companies are a bunch of conniving monsters who should be forced to relinquish any and all monopolies that they enjoy. This whole thing makes me sick to my stomach.
The lawsuit alleges that the four companies engaged in illegal conduct, sharing nonpublic information among themselves, to gain bargaining leverage in negotiations with Time Warner Cable, which was struggling to get the pay TV companies to sign up for the channel.
UPDATE: Per a Justice Department press release:
The lawsuit, filed in the U.S. District Court for the Central District of California, alleges that DIRECTV unlawfully exchanged competitively-sensitive information with Cox, Charter and AT&T during the companies’ negotiations for the right to telecast the Dodgers Channel. Specifically, the complaint alleges that DIRECTV and each of these competitors agreed to and did exchange non-public information about their companies’ ongoing negotiations to telecast the Dodgers Channel, as well as their companies’ future plans to carry – or not carry – the channel. The complaint also alleges that the companies engaged in this conduct in order unlawfully to obtain bargaining leverage and to reduce the risk that they would lose subscribers if they decided not to carry the channel but a competitor chose to do so. The complaint further alleges that the information learned through these unlawful agreements was a material factor in the companies’ decisions not to carry the Dodgers Channel. The Dodgers Channel is still not carried by DIRECTV, Cox or AT&T.
“As the complaint explains, Dodgers fans were denied a fair competitive process when DIRECTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team,” said Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s Antitrust Division. “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace.”
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