News

Justice Investigates Predatory Pricing

9/22/2002 8:00 PM Eastern

The Justice Department is investigating an unnamed cable company to determine whether the firm has engaged in predatory pricing intended to harm a competitor.

The investigation was revealed Thursday in Senate testimony by Charles James, chief of the department's Antitrust Division.

In an appearance before the Senate Antitrust, Competition, Business and Consumer Rights Subcommittee, James was asked to respond to allegations that established cable operators have slashed prices in a manner designed to injure new wireline competitors, also called overbuilders.

James said at least one cable company was under investigation, but did not provide the name.

"I know for a fact that we have at least one circumstance in which allegations of predation involving an overbuilder are under investigation, and we are taking a serious look at it," said James, whose division is now reviewing the proposed merger of cable MSOs AT&T Broadband and Comcast Corp.

Testifying before the same subcommittee in April, Mark Haverkate, CEO of cable overbuilder WideOpenWest LLC, complained that Comcast and AT&T were running a price-slashing campaign that was anti-competitive because it targeted WOW customers, or Comcast and AT&T customers thinking about switching to WOW.

In response, AT&T chairman and CEO C. Michael Armstrong said his company's cable pricing was designed to meet competition not just from WOW, but from other pay TV providers.

Want to read more stories like this?
Get our Free Newsletter Here!
September