While a district court didn’t determine that Viacom acted anticompetitively in a carriage deal with Cablevision, the rejection of the cable programmer’s motion to dismiss the case is still a mildly unwelcome development for Viacom and content companies, said a Guggenheim Partners analyst. If Cablevision’s evidence can support its claims over Viacom’s evidence, “Cablevision is likely to prevail,” Paul Gallant said in a research note Monday. Cablevision alleged that Viacom engaged in illegal “tying” and forced the cable company to carry 14 networks that its customers don’t watch during a carriage deal (CD Feb 27/13 p11). The U.S. District Court for the Southern District of New York denied Viacom’s motion last week (CD June 23 p17). Cablevision has proffered subscription, demographic and other statistical information “that suffice at this pleading stage to make plausible its market definition allegations,” said Judge Laura Swain in a memorandum order. Viacom programming licensing arrangements are “flexible, competitive and the result of good-faith negotiations with distributors,” Viacom said in a statement. “Although we are disappointed that the court did not dismiss these claims at the outset, we are confident that Cablevision will fail to prove the facts required to prevail in their case.” A victory for the cable company might be a concern for content companies by raising legal uncertainly over their longtime bundling strategy, Gallant said. If the court concludes that Viacom violated antitrust law, that could feed into the nascent Telecom Act rewrite, or a narrower bill updating the 1992 Cable Act “in an unwelcome way for content companies,” he said.

The U.S. District Court for the Southern District of New York denied Viacom’s motion to dismiss an antitrust suit filed by Cablevision. The motion was dismissed Friday in an opinion by Judge Laura Swain. Cablevision alleged that in order to carry core networks Viacom forced it into carrying 14 networks that its customers don’t watch (CD Feb 27/13 p11). Cablevision said it’s “gratified” that the court ruled that Cablevision stated “a valid antitrust claim against Viacom for illegal channel tying.” Cablevision continues to believe that “Viacom’s tying of its popular networks to carriage of its lesser-watched ancillary networks is illegal, anti-consumer and wrong,” it said in a statement.

CenturyLink urged the FCC to take steps to facilitate fair retransmission consent negotiations by opening a proceeding on the Block Communications petition. CenturyLink agrees with Block that consolidation among broadcast stations and multichannel video programming distributors is “increasingly removing more localized marketplace considerations from retransmission consent negotiation discussions to the detriment of consumers in those markets,” it said in a filing in docket RM-11720 posted Friday (http://bit.ly/1lGJiRH). The FCC should modify its rules to promote fair retrans negotiations involving smaller, competitive MVPDs and broadcast stations, it said. Block asked the FCC to adopt “heightened good faith bargaining standards” for markets where smaller companies are more likely to be harmed by bargaining power of larger broadcasters and MVPDs (http://bit.ly/1iQRY3M). The American Cable Association (http://bit.ly/1nps2Pf) supported the petition; NAB is opposed. The FCC lacks authority to adopt the Block proposal, NAB said (http://bit.ly/1m4fJKh). Block somehow assumes, “without analysis or discussion, that the Commission has authority to approve its proposal under the good faith bargaining provisions of the Communications Act,” NAB said. If the FCC required broadcasters and MVPDs to submit for review details of their offers and other market and ratings data, it would “be in the driver’s seat, deciding what retransmission consent ‘negotiating positions,’ including rates, are ‘reasonable,'” it said.

The Alliance for Community Media urged the FCC to act on ACM’s 2009 petition to declare AT&T’s offering of public, educational and government access (PEG) channels on U-Verse inadequate. ACM also urged the commission not to act on AT&T’s proposed buy of DirecTV until it acts on the petition, the alliance said in an ex parte filing posted Tuesday in docket 09-13 (http://bit.ly/1yelQB0). The group has said it would revisit arguments in support of the petition, which has been pending for five years (CD June 6 p6). PEG channels “should receive equal treatment, in terms of subscriber accessibility and functionality, to local broadcast and other commercial channels on a cable system,” it said. ACM doesn’t seek to pre-empt any state law or local franchise, it said in an attached filing (http://bit.ly/1ni9Zur). The franchises under which each of the individual local government and PEG center petitioners operate, be they state or local franchises, “require the operator to set aside ‘capacity’ for PEG use and to provide PEG ‘channels,'” it said.

Game Show Network and Cablevision reached an agreement for a discovery schedule in their FCC program carriage dispute, the companies said in a status report Tuesday (http://bit.ly/1pe49gE). The schedule calls for the two sides to produce supplemental documents until September, and identify expert and fact witnesses through December. Depositions will be conducted through January, said the filing in docket 12-122. It said the schedule may “enable the parties to benefit” from any commission ruling on Tennis Channel’s petition for the FCC to take up its dispute with Comcast again (CD March 12 p24).

Wow agreed to divest its South Dakota systems to Clarity for about $262 million. Wow systems in Sioux Falls and Rapid City had more than 52,500 customers March 31, and generated annual revenue of about $81.1 million in 2013, Wow said Friday in a news release (http://bit.ly/1pUl9Ih). The sale will enhance Wow’s operating efficiencies and enable it to continue focusing on long-term strategic initiatives, it said. RBC Capital Markets was Wow financial adviser on the transaction, it said.

The FCC should act on Sky Angel’s four-year-old complaint against Discovery Communications and declare Sky Angel a multichannel video programming distributor, Sky Angel said in docket 12-83 (http://bit.ly/1nckD5Q). Sky Angel “suspended” its audio and video distribution services because without the MVPD designation it can’t purchase the rights to valuable content or compete with MVPDs, said Tuesday’s filing. “Sky Angel simply cannot operate until programmers permit it to purchase competitive video products to distribute on its system.” Sky Angel chastised the commission for not acting on its complaint while completing far more complicated projects, such as the incentive auction order. If the commission did act on its complaint and designate it an MVPD, Sky Angel would “work to resume operations,” said the online programmer that wants access to Discovery’s cable channels.

Bright House Networks is carrying Star India Plus in Orlando and Tampa Bay, the operator said Thursday in a news release. The channel airs Hindi language dramas, children’s programming, Bollywood movies and other content, it said.

Regulators should block Comcast buying Time Warner Cable as being bad for consumers, said the American Antitrust Institute in a white paper released Wednesday (http://bit.ly/1xJTv56). The deal would let Comcast “exercise buyer market power against content and middle-market service providers and potentially exclude rivals,” said AAI in a news release (http://bit.ly/1uXUT1Y). “The deal doesn’t pass the cost-benefit test,” said AAI President Bert Foer. With the net neutrality debate and AT&T agreeing to buy DirecTV (see separate report above in this issue) and other telecom deals occurring at the same time as Comcast/Time Warner Cable, regulators should adopt a “go-slow policy” in deciding to approve it, AAI said. “We don’t think the merger is fixable, given what would need to be done on the remedies side to ensure that competition and consumers are not harmed,” said Vice President Diana Moss. Comcast had no immediate response.

A status update on the program carriage dispute between Cablevision and Game Show Network was delayed until Friday at both companies’ request, said an order from FCC Chief Administrative Law Judge Richard Sippel posted Tuesday in docket 12-222 (http://bit.ly/1l4OSNF). The companies had requested more time to complete discovery (CD June 6 p14).