Cablevision (NYSE:CVC) has filed a lawsuit that could end up changing the entire pay-TV landscape.
The cable TV provider is suing Viacom (NASDAQ:VIAB), accusing the media company of anti-competitive practices for bundling its low-rated cable channels with higher-rated channels and demanding that subscription television services take all or none of the channels. It is also asking the court to invalidate its current carriage deal with Viacom, the Los Angeles Times notes.
Cablevision said that in order to get the rights to carry Comedy Central, MTV and Nickelodeon, Viacom forced it to put 14 other lower-rated networks on its system.
Pay-TV service rivals, Time Warner Cable (NYSE:TWC) and DirecTV (NASDAQ:DTV), expressed support for Cablevision’s lawsuit. In December, Time Warner Cable’s CEO threatened to drop low-rated channels from the service, citing rising carriage fees.
Responding to the suit, Viacom argues that it offers discounts for high-rated channels to providers who also carry the less popular networks. It noted that such bundling agreements have been standard in the industry for years and have been upheld by the courts.
Cablevision shares rose fractionally in midday trading on Wednesday, while Viacom climbed more than 1%.