Cablevision faults Viacom 'strong-arm' bundling tactics

Thu Mar 7, 2013 5:45pm EST

* Cablevision says forced to buy channels it did not want

* Viacom calls lawsuit hypocritical

March 7 (Reuters) - Cablevision Systems Corp has accused Viacom Inc of having "strong-armed" it into forcing it to pay for low-rated channels it did not want in order to access better-known channels such as Comedy Central, MTV and Nickelodeon.

The allegations were revealed in an antitrust lawsuit made public, with some language blacked out, on Thursday in Manhattan federal court.

Cablevision said that to obtain some of Viacom's most popular channels, Viacom forced it to distribute "some dozen other Viacom networks, which Viacom calls Suite Networks, that many Cablevision subscribers do not watch and for which Cablevision would prefer to substitute competing networks."

Viacom in a statement called the lawsuit "nothing more than a hypocritical attempt by Cablevision to void a long-term carriage deal they agreed to only two months ago."

Industry experts are watching to see whether the case breaks new ground in the debate over "bundling."

This is where programmers such as Viacom sell packages of channels to distributors such as Cablevision, rather than sell only channels that the distributors want.

Bundling can help programmers boost profit, but can also result in viewers paying higher cable fees as distributors pass on the extra costs.

The case is Cablevision Systems Corp et al, v. Viacom International Inc et al., U.S. District Court, Southern District of New York, 13-01278.