WASHINGTON – AT&T and DirecTV acted as ringleaders in an illegal plot against the Dodgers Channel that kept Los Angeles sports fans from watching their favorite team on television, according to a lawsuit filed Wednesday by the Justice Department.
The anti-collusion suit alleges that DirecTV – and its corporate parent, AT&T – shared private negotiating information in 2014 with other TV providers, including Cox Communications and Charter Communications, in order to gain a collective advantage over Time Warner Cable, which was selling licenses to air the Dodgers Channel on other networks. By simultaneously agreeing not to carry the channel, each TV provider could breathe easier knowing their customers would not be able to switch to a provider that did carry live Dodgers games, according to the suit.
Evidence reviewed by the Justice Department allegedly showed DirecTV’s chief content officer, Daniel York, intentionally trading information with Cox and Charter in an attempt to drive down the price that the TV providers would need to pay to carry the channel on their networks.
Internal communications between DirecTV executives showed chief executive Mike White understood the implications of a pact, saying the companies “may have more leverage if we all stick together,” according to the suit. To this day, the Dodgers Channel is still unavailable on AT&T, DirecTV and Cox.
“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,” Deputy Assistant Attorney General Jonathan Sallet said in a statement.
AT&T bought DirecTV last year for $49 billion, creating the nation’s biggest pay-TV provider. AT&T said Wednesday that it makes carriage decisions independently – and that the negotiations in question took place before it acquired DirecTV.
“No other major TV provider chose to carry this content,” said AT&T in a statement, because “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 LA Dodgers baseball.”
The suit comes at a delicate time for AT&T, whose massive acquisition of Time Warner (not to be confused with Time Warner Cable) will also likely be reviewed by the Justice Department. The federal government’s case Wednesday against DirecTV and AT&T therefore raises uncomfortable questions for the telecom giant about its ability to harm competition.
“In general when you want to clear a giant merger with the DoJ you want to avoid being sued by the DoJ,” tweeted John Bergmayer, a senior staff attorney at the consumer advocacy group Public Knowledge.
Charter declined to comment. Cox didn’t immediately respond to a request for comment.
(c) 2016, The Washington Post ยท Brian Fung
