Consumer Groups Want DOJ Probe of TV Everywhere
Consumer groups want the Justice Department to investigate whether the pay-TV industry illegally colluded in developing the TV Everywhere service. Seven groups made the request in a letter Monday to Assistant Attorney General Christine Varney, chief of the Antitrust Division. The “headline issue” is the industry’s push to bundle online video content with cable TV through deals that could exclude content from other distribution channels, said Free Press Policy Director Ben Scott in a conference call with reporters. Cable industry officials said the service will give viewers new choices.
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There’s “sufficient evidence in the public record” to justify an investigation, said a report written by University of Nebraska Professor Marvin Ammori, an adviser to Free Press, and sent to Justice. He said the cable, phone and satellite industry “forged an agreement … designed to crush online competition while being marketed as a consumer-friendly feature.” Comcast started an expanded trial of the service in mid-December (WID Dec 16 p7) to 15.7 million of subscribers, with plans to roll out full service in six months. The principles of the plan “clearly state that TV Everywhere is meant only for cable operators, satellite operators and phone companies,” Ammori’s report said.
The call for investigation “has no factual or legal basis,” NCTA President Kyle McSlarrow said in a blog post. The service envisions agreements between individual programmers and distribution, he said. Calling the process of making those agreements collusion “is, to be kind, strange,” McSlarrow said. Antitrust laws “do not prohibit, but encourage collaboration, even among competitors, that lead to innovation and new products and services for consumers."
“We think there is sufficient evidence for government authorities to dig in and really understand what is going on in the industry,” Ammori said. The cable industry “has long been broken and inadequate for consumers,” said Joel Kelsey, policy analyst for Consumers Union. TV Everywhere would pull more content “behind a pay wall,” limiting its availability to consumers who don’t want to pay for cable service, he said. “We want to make sure federal regulators take a tough look at this.”
“We're not calling for all content on the Internet to be free,” Scott said, saying his greatest concern is the risk that the service will lock up programming through exclusive deals between content providers and distributors. The service could “undermine new forms of competition and consumer choice currently emerging over the Internet,” said the group’s letter to Justice. Copies were sent to the FCC, the FTC and the House and Senate Commerce and Judiciary committees. TV Everywhere “appears to be a textbook example of collusion,” Ammori said, because the service consists of agreements among competitors to “divide markets, raise prices, exclude new competitors and tie products."
The report cites newspaper and trade publication reports describing meetings at industry conferences where executives discussed plans for the service. The newspaper industry held similar discussions in 2009 at an industry conference to consider how to put material behind pay walls, Ammori said. But those talks were monitored by a lawyer, and later the industry asked at a congressional hearing for a limited antitrust exemption to continue them. Justice opposed that request, Ammori said. “We think there is more than sufficient evidence” for the government to study the case, said Matt Wood, Media Access Project associate director.