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2 | Monday, august 11, 2014 | Commercial Litigation
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as Palladia, MTV Hits and VH1 Classic) as a
The Future of Channel Bundling:
condition to licensing four more desirable
networks (such as Nickelodeon, Comedy
Central and MTV), constitutes a per se ille-
Full Course Option, or TV à la Carte?
gal “tying” arrangement under federal and
New York antitrust laws, as well as prohibited
block-booking.
On June 20, 2014, Judge Laura Taylor
Swain denied Viacom’s motion to dismiss,
and as the parties proceed to discovery, it

behooves industry-watchers to follow devel-
opments in this latest challenge to channel
bundling, as it could have ramifications on
how channels are licensed at the wholesale
level (from programmer to distributor) and
then sold at the retail level (from distributor
to consumer). Indeed, Cablevision’s lawsuit
comes on the heels of Brantley v. NBC Univer-
sal,
3 an unsuccessful attempt by a putative
class of television consumers in the Ninth
Circuit to bar channel bundling in both the
programmer-to-distributor and distributor-
to-consumer markets as illegal tying arrange-
ments. Notably, both Viacom and Cablevision
were defendants in Brantley.
On another front, in May 2013, Sen. John
McCain introduced bill S. 912, the Televi-

sion Consumer Freedom Act of 2013, which
is aimed at curbing channel bundling to
consumers in favor of an “à la carte” model. K
Under such a model, television customers TOC
could choose to pay for individual channels IGS
rather than a larger grouping.
B
This article analyzes some of the key legal
questions surrounding the channel bundling
debate, including the requirements of an anti-

trust tying claim; compares and contrasts
Cablevision and Brantley; and assesses the
challenges that lay ahead for Cablevision
and others that hope to ultimately undo the
bundle.

Antitrust Tying Law

Section 1 of the Sherman Act prohibits
“[e]very contract, combination in the form existing broadcasting norms by using tiny cable and satellite industry. In Cablevision
of trust or otherwise, or conspiracy, in By DaviD L. yohai antennas to receive broadcast signals and Systems v. Viacom Int’l,2 a major distributor
restraint of trade or commerce among the anD DaviD yoLkut
then transmitting the content to its users via of cable television programming, Cablevision,
several States.”4 The U.S. Supreme Court has
T the Internet. This past June, the U.S. Supreme sued one of the industry’s largest programmer
wo summers ago, we highlighted in these Court handed the broadcasters a definitive conglomerates, Viacom, over the common
pages the potential significance of an victory, finding that Aereo’s service violates
practice of “channel bundling” (i.e., offering
injunction action—then-pending before
1
the Copyright Act of 1976. Considerably less
popular, or “must-have,” channels together
DaviD L. Yohai is a partner at Weil, Gotshal & Manges, Judge Alison Nathan in the Southern District ink has been devoted thus far to another law- with unpopular channels). Cablevision claims
where he is co-head of the complex commercial liti-
gation group. DaviD YoLkut is an associate in the of New York—brought by several broadcast- suit now pending in the Southern District, that its 2012 license agreement with Viacom,
group. Sara LonkS, a summer associate, assisted in ers (including CBS, ABC and NBC) against the which to a different degree also threatens which allegedly requires Cablevision to
the preparation of this article.
start-up Aereo, a company that challenged
long-standing commercial practices in the
license a dozen, less-popular networks (such

Inside
Commercial Litigation

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