January 15, 2020
Comcast has moved to dismiss an antitrust lawsuit filed by Altitude TV by shooting down claims that the cable operator has refused to deal with the Denver-based regional sports network and that the cable op has a monopolistic pay-TV position in the market.
Comcast's motion filed Tuesday, January 14, with a Colorado court arrives almost two months after Altitude Sports & Entertainment, which owns and carries games for the NBA's Denver Nuggets and NHL's Colorado Avalanche, filed the original complaint.
Altitude claims that Comcast is violating antitrust laws by trying to drive it out of business and possibly attempting to seize control of the local sports TV market with its own regional sports network. Altitude also contends that Comcast demanded "dramatic cuts" in rates and sought to move the regional sports net to a less popular and not as widely distributed sports package.
Altitude's last contract with Comcast expired on Aug. 31, 2019. Altitude also has failed to forge a new carriage deal with Dish Network and remains blacked out by that pay-TV provider. Altitude recently struck a new deal with AT&T/DirecTV and is still carried in the market by CenturyLink (Prism TV) and in some areas served by Charter Communications.
The impasse between Comcast and Altitude comes in an era of generally increased tensions between programmers and pay-TV providers as video subscriber numbers dip and content costs, particularly around sports rights, rise. Pay-TV providers have been increasingly reluctant to pack a lot of sports channels into basic channel lineups to keep prices in check and to address complaints from viewers who don't want to pay for those specialized networks. However, Altitude's historic business model has been based on broad-based distribution in the region.
Comcast called Altitude's suit a "transparent maneuver to gain negotiating leverage," arguing that the complaint "comes nowhere close to stating a valid antitrust or tort claim and should be dismissed."
Comcast disputes that it has been unwilling to deal with Altitude, and contends that it is not a monopolist in the market. While court filings say Comcast has about 57% of the video subs in the Denver area, it falls short of the 70% to 80% necessary required for monopoly power under court precedent, the cableco said.
Comcast also shot down allegations by Altitude that the cable operator, which does own RSNs in other US markets, would attempt to drive Altitude out of business and create its own by securing sports rights from teams that are owned by Altitude, calling such suggestions "implausible."
Wheeling but no dealing
Regarding carriage negotiations, Comcast notes that Altitude made two renewal offers, which included a minimum requirement that Comcast distribute Altitude to most of Comcast's customers. Comcast said in countered with a three-year deal without minimum distribution requirements, at a flat monthly fee, instead of a per-subscriber fee, with annual increases.
"Through this litigation, Altitude seeks to compel Comcast to carry it in perpetuity on terms 'similar' to a contract from 2004," Comcast told the court. "But the antitrust laws do not require indefinite dealing, much less on particular terms."
Comcast also filed a motion to stay discovery pending the court's decision on its motion to dismiss Altitude's lawsuit.
Update: On Tuesday, January 21, the Colorado court ordered a temporary stay of discovery as the court decides on Comcast's motion to dismiss the case. Per the court's order, discovery is now set to begin January 29, 2020.
Altitude has already been clear that creating a standalone, OTT version of the service to help bridge the gap isn't economical as it would be impossible for the network to get enough subscribers under a direct-to-consumer model at a rate that would make such a move affordable. Altitude has explored distribution partnerships with OTT-TV services such as YouTube TV and Hulu, but notes here that it has been unable to reach a deal "that would provide a sufficiently broad-based distribution to make such arrangements viable."
— Jeff Baumgartner, Senior Editor, Light Reading
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