HDNet Sues DirecTV Over Tier Shift
By Linda Moss -- Multichannel News, 11/11/2007 7:00:00 PM
Mark Cuban's HDNet is suing DirecTV over plans to move the service to a pricier tier for “HD-only” channels, an offering with less penetration that the satellite provider's basic high-definition TV package.
The lawsuit, filed in U.S. District Court in Dallas earlier this month, charges that the nation's largest satellite provider is violating a carriage deal by shifting both HDNet and its sister service, HDNet Movies, to the DirecTV HD Extra Pack.
That premium HDTV tier, with just a handful of services, will cost subscribers $4.99 a month, a fee on top of the $9.99 HD Access Fee that DirecTV charges for its newly expanded lineup of more than 70 national HD networks.
“In gross violation of their contractual obligations, defendants have decided to effectively kill HDNet's viewership by moving the two HDNet networks from their current DirecTV broadcast package — where the channels are distributed to more than 2 million households — to a newly created obscure and overpriced package that puts their HDNet channels well beyond the average television viewer,” HDNet charges in its 26-page lawsuit.
HDNet also claims DirecTV is giving preferential treatment to channels owned by Liberty Media, which is acquiring News Corp.'s 38.5% stake in the satellite provider.
Word first leaked in September that DirecTV planned to create a special tier of HD-only networks such as HDNet, HDNet Movies, MHD, MGM HD, Universal HD and Smithsonian HD.
HDNet also wants a temporary restraining order barring DirecTV from starting to offer the HD Extra Pack Dec. 15.
DirecTV last week denied HDNet's allegations. “We are disappointed that our business partner would ignore the plain language of our agreement and file an unnecessary lawsuit coupled with a request for the unwarranted, extraordinary relief of a temporary restraining order,” DirecTV spokesman Robert Mercer said.
“They have not provided any concrete evidence to support their claims,” Mercer said. “We are acting in accord with our agreement with HDNet and we will defend the lawsuit vigorously.”
HDNet claims that under its current contract with DirecTV it is guaranteed carriage on the satellite provider's most-widely distributed HDTV tier or package.
HDNet's cable carriage is at least mostly on HD pay tiers.
HDNet also claims both News Corp., one of DirecTV's current owners, and Liberty Media, a future owner, are getting preferential carriage for their HDTV networks by the satellite provider, distribution as part of the main HDTV offering.
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