Cablevision today filed a federal lawsuit against Viacom, claiming that the media company has forced it to pay for "14 lesser-watched ancillary networks its customers do not want" in order to keep popular channels like MTV, Comedy Central, and Nickelodeon in its lineup.
The suit calls out Palladia, MTV Hits and VH1 Classic as just a few of these undesirable networks and claims that Viacom has "abused its market power" to coerce the cable provider into carrying the channels. "Viacom's conduct harms Cablevision and its customers," reads a press release announcing the legal front. Cablevision asserts that Viacom's program bundling violates federal antitrust laws. It's asking the court to establish a permanent injunction "barring Viacom from conditioning carriage of any or all of its core networks on Cablevision's licensing any or all of Viacom's ancillary networks." Further, the cable operator also wants out of an eleventh-hour licensing deal it struck with Viacom at the end of last year.
Disagreements between content providers and cable companies have become increasingly common and public-facing in recent years, though today's suit represents one of the biggest rifts we've seen yet. Cablevision's official statement on the situation follows below:
The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong. Viacom effectively forces Cablevision's customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom's abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom's less popular channels.
Update: Viacom has since responded to the Cablevision suit. In a statement to The Verge, the company said:
At the request of distributors, Viacom and other programmers have long offered discounts to those who agree to provide additional network distribution. Many distributors take advantage of these win-win and pro-consumer arrangements. Reflecting the highly competitive cable programming business, these arrangements have been upheld by a number of federal courts and on appeal. Viacom will vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement.
Further, Viacom's president and CEO Philippe P. Dauman has also criticized the lawsuit as "ill-advised and frivolous." Speaking at Deutsche Bank's DbAccess 21st Annual Media and Telecom Conference, he painted Cablevision's expectations as unrealistic. "It doesn't happen in our business. It doesn't — in any industry," he said according to a transcript. "That's the nature of providing a discount for getting all these services."