Cablevision said the practice of selling channels as a package, instead of individually, is a “per se” tying arrangement that violates federal and New York state antitrust laws.
The companies also said that they are “simultaneously entering into mutually beneficial business arrangements”, but they did not provide details.
The suit was filed in US District Court in New York in early 2013, a few months following Cablevision and Viacom agreeing to a new distribution agreement for the Viacom channels.
In order to stave off more cable customer defections, pay-TV companies have been tailoring smaller “skinny” bundles of channels to encourage subscribers to stay with their services.
Cablevision claimed that Viacom forced it to carry 14 lesser-watched channels as a condition of getting carriage of MTV, Comedy Central, Nickelodeon and BET, known as Viacom’s “core” channels. The harm alleged was that Cablevision couldn’t use its resources on other independently operated networks.
Viacom argued that Cablevision had not been ale to demonstrate marketplace foreclosure and that the “discount” that Cablevision got on the bigger networks by accepting the smaller ones a normal TV industry practice.
The cable company alleged that that Viacom threatened to “impose massive financial penalties, unless Cablevision complied with Viacom’s demands”.
The parties, however, had reached an undisclosed agreement.
Cablevision recently agreed to a $17.7 billion takeover bid by European telecom magnet Altice NV, which has pledged to trim $900 million from the MSO’s annual budget over the next five years.