Justice Department sues AT&T-DirecTV, alleges collusion in blocking Dodgers channel – Los Angeles Times
The U.S. Justice Department on Wednesday took the extraordinary step of suing AT&T, alleging that its DirecTV television unit orchestrated an illegal campaign to block wide carriage of the television channel owned by the Los Angeles Dodgers.
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.
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.
DirecTV, now owned by AT&T, and Cox Communications have refused to carry the channel, citing its high cost.
“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,” Deputy Assistant Atty. Gen. Jonathan Sallet of the Justice Department’s antitrust division, said in a statement. “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.”
The lawsuit comes at an awkward time for AT&T, which just unveiled its $85.4-billion deal to buy media and entertainment giant Time Warner Inc. (Time Warner Cable is a separate entity owned by Charter Communications and is being renamed Spectrum). AT&T will need Justice Department approval for that deal to go through, and critics contend the merger will make AT&T even more powerful.
In responding to the lawsuit, David McAtee, AT&T general counsel, said: “We respect the [Justice Department’s] important role in protecting consumers, but in this case, which occurred before AT&T’s acquisition of DIRECTV, we see the facts differently.
“The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to L.A. Dodgers baseball. We make our carriage decisions independently, legally and only after thorough negotiations with the content owner. We look forward to presenting these facts in court.”