AT&T Sued Over RSN Pricing

Small cable op says it has to pay too much for SportsNet Southwest

A tiny cable operator is taking on AT&T over the price of a regional sports network, raising issues of access to programming and anticompetitive conduct.

The suit, filed by En-Touch, which operates in the Greater Houston area, comes days after the Justice Department filed suit to block the AT&T-Time Warner merger over the same concerns.

En-Touch, a member of the American Cable Association, filed its antitrust suit against AT&T-DirecTV in a Los Angeles District Court, alleging that DirecTV pays above-market rates for AT&T SportsNet Southwest in Houston, an RSN the satellite provider co-owns.

En-Touch told the court that regional sports is must-have programming, as the FCC has pointed out, particularly for new entrants trying to compete with pay TV's major-league players.

As a result, En-Touch said it has to carry the RSN -- which is home to the Houston Astros MLB and Houston Rockets NBA teams -- but at an inflated price due to the pricing structure that caused the network's demise under its previous ownership by Comcast.

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"The continuation by Defendants of the artificially high pricing structure allows Defendants to plead innocence when accused of anti-competitive pricing, proclaiming that AT&T SportsNet is expensive for all MVPDs, including Defendant MVPDs," En-Touch argued.

"Thus, the arrangement is a win-win for AT&T because it receives a revenue boost from its subsidiary, AT&T SportsNet, while both harming small MVPDs and keeping an entrance barrier for other MVPDs trying to enter the market."

En-Touch said that is restraining of trade and an attempt to monopolize the market.

The suit even added some net-neutrality/zero-rated issues for good measure: "AT&T chairman and CEO Randall Stephenson has been vocal in his proclamation that AT&T is aggressively pursuing even more of that market, especially through the company’s 'zero-rated services' like U-verse Data Free TV and DirecTV Now," En-Touch told the court. "In this instance, 'zero-rated services' are those that a telecommunications data provider like AT&T does not count against an individual subscriber’s data plan. In other words, AT&T allows individual subscribers using its cellular network to stream video via services like U-verse Data Free TV and DirecTV Now on the U-verse or DirecTV app without counting against that individual’s data plan."

En-Touch wants treble damages, attorneys fees and a jury trial.

"We believe the complaint lacks merit and we’ll vigorously defend it in court," AT&T said in response.