Thursday, July 10, 2014
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Judge orders Comcast trial in antitrust complaint

PhillyDeals: Cable subscribers will get a jury trial on whether Comcast overcharged up to $875 million.

Judge orders Comcast trial in antitrust complaint

e Third Amended Complaint alleges that Comcast entered into
agreements with its competitors to allocate the nation’s regional cable markets amongst themselves
through swaps of their respective cable assets.  The Class alleges that, as a result of all the swap
agreements, Comcast unreasonablyrestrained trade and willfullyobtained and maintained monopoly
power in the relevant geographic market, the Philadelphia direct marketing area (“DMA”).  The
Class contends that Comcast has used its monopoly power to raise cable prices to artificially high,
supra-competitive levels.  For the following reasons, we grant Comcast’s motion for summary
judgment on the Class’s section 1 claim, insofar as it charges that Comcast’s conduct was a per se
violation of the antitrust laws.  We also grant the motion in part on the Class’s section 2 claims.

Philadelphia-area cable TV customers' nine-year-old Sherman Act complaint that Comcast's monopoly power kept competition out of the market and allowed it to overcharge consumers can go to trial, federal Judge John R. Padova Jr. ruled yesterday, after striking several arguments he said weren't supported by enough facts.

"The decision says, in short, that cable subscribers in the Philadelphia area will get a jury trial on whether Comcast overcharged for cable services," lawyer Barry Barnett of Texas-based Susman Godfrey LLP, told me. 

"We are gratified at the court's ruling dismissing some of the claims and limiting the remaining claims, and we look forward to defending the smaller claims that remain and obtaining a favorable ruling on those," said Sheron Korpus, a partner at Kasowitz, Benson, Torres & Friedman LLP, which defended Comcast. 

 

According to Padova's memorandum supporting his ruling, lawyers for the consumers "presented evidence from which a jury could find that Comcast had monopoly power" because of the way it bought  Philadelphia-area cable firms that had previously competed with it for local service franchises, reducing competition; that Comcast may have "acted with predation" illegal under the Sherman Antitrust Act when it targeted special discounts to customers of rival cable provider RCN in hopes of driving the company out of the market; and that Comcast's conduct stopped RCN from expanding and offering more customers competitive service.

But Padova also told consumer attorneys to drop other claims they had hoped to use at trial, including the argument that Comcast broke the law simply by buying up competing local companies, since Comcast could show the combinations created "efficiencies" and made it easier to improve services; he also disallowed the claim Comcast wrongly stopped contractors from working for RCN, since RCN was able to find other contractors. 

Padova's 72-page decision referenced testimony from top Comcast executives Brian L. Roberts and Steven Burke, along with lower-ranking managers, contractors and economic experts for both sides.

Plaintiffs have estimated overcharges at $875 million, a figure Comcast disputes. Similar complaints were filed in Boston and Chicago. The Philadelphia case is Behrend v. Comcast, U.S. District Court for Eastern Pennsylvania 03-6604.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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